SunSirs: Price of Cobalt Fell and Rose Sharply after the Spring Festival

1.Trend analysis

According to the data monitoring of SunSirs: after the Spring Festival, the cobalt price has been greatly adjusted, and the market situation of the cobalt market has been turbulent. As of February 10, the price of cobalt was 269,166.66 RMB/ton, down 2.06% compared with the average price of 274,833.34 RMB/ton before the festival.

2. Market analysis

LME cobalt price

From the trend chart of LME cobalt price, we can see that after the Spring Festival, the LME market cobalt price fluctuated and adjusted, and the overall cobalt price rose sharply, which is good for the domestic cobalt Market and good for the future cobalt market.

MB cobalt price

It can be seen from the table that after the Spring Festival, the price of MB cobalt rose sharply and the market of cobalt rose. But in the near future, the increase of cobalt price has dropped significantly, and the price of cobalt has stabilized. The international cobalt price has increased substantially, the domestic cobalt market is good, and the cobalt price has a strong momentum.

The Democratic Republic of Congo plans to control the artisanal cobalt industry

According to Reuters, the government of the Democratic Republic of Congo has announced ambitious plans to control the artisanal cobalt industry in the western part of the country. The DRC will establish a new state-owned company, the EGC cobalt enterprise, which will be granted a monopoly on the purchase and sale of cobalt from the informal sector. The government of the Democratic Republic of the Congo sees this as a way to clean up the artisanal cobalt industry. If the new EGC successfully controls the production of artisanal cobalt, it will become a global swing producer, and it will have pricing power in the international market. The regulation of artisanal cobalt production in the DRC is bound to increase the price of cobalt, which will play a certain role in raising the price of metal cobalt in the future.

The production and sales volume of new energy vehicles in January 2020 is expected to decrease by 30% year on year

Affected by the Spring Festival holiday in 2020 and the outbreak of the epidemic, the scale of production and sales of new energy vehicles in China is expected to decline significantly in January 2020 compared with the same period last year. The sales volume of BYD new energy vehicles in January 2020 is 7,133, down 75.12% from the same period in 2019, according to the sales volume express data released by BYD. According to the sales data released by BAIC bluevale, the sales volume of BAIC new energy in January 2020 was 2006 units, down 55.54% compared with the same period of last year (4,512 units). According to media expectations, the production and sales scale of new energy vehicles in China is expected to decline by 30% in January 2020 compared with the same period of last year, and the market will show a year-on-year decline trend in February and March 2020. It is conservatively estimated that the sales volume of new energy vehicles in the first quarter will decline by at least 20% compared with the same period of last year. The sharp drop in sales of new energy vehicles and the poor demand of cobalt market have some negative effects on the spot price of cobalt market.

3. Future prospects

Data analysts of SunSirs believe that after the Spring Festival, affected by the epidemic, the sales of new energy vehicles fell sharply, the sales of mobile phones and other products also fell significantly, the demand of cobalt market was not optimistic, the support for the rise of cobalt price was insufficient, the international cobalt price rose sharply, which was good for the domestic cobalt Market; the DRC strengthened efforts to regulate the artisanal cobalt, and the global supply of cobalt Market decreased in the future, and the cost of cobalt mine The increase will play a significant supporting role in the future cobalt price rise, and the future cobalt price rise is full of strength. Generally speaking, the future cobalt market is obviously positive, and the cobalt price is full of momentum. However, due to the poor domestic demand for cobalt in the near future, the price of cobalt may still fluctuate in the near future. In the long run, the price of cobalt will rise significantly.

Related listed companies: Huayou cobalt (603799), Hanrui cobalt (300618), Luoyang molybdenum (603993).

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