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SunSirs: The Performance of China's Cobalt Market is Volatile in 2020, and Cobalt Prices Return to the Beginning of the Year in October

November 02 2020 09:25:14     SunSirs (Linda)

1. Trend analysis

According to SunSirs data monitoring, the performance of the cobalt market in 2020 is turbulent, with cobalt prices rising and falling sharply, and cobalt prices returned to the beginning of the year in October. As of October 31, the cobalt price was RMB 268,666.66/ton, a slight increase of RMB 266,500.00/ton from the beginning of the year (January 1), an increase of 0.81%. In 2020, the cobalt market will rise and fall sharply, going through several stages: January-February, the expected rising stage before the epidemic; March-April, the epidemic affected the suspension stage; May-July, the cobalt market recovery stage after the epidemic; 8- In October, the post-epidemic era struggled to fall back.

2. Domestic mobile phone production and sales data in 2020

According to statistics from China Academy of Information and Communications Technology, in 2020, domestic mobile phone sales will drop sharply, and demand for cobalt will drop. Affected by the epidemic, mobile phone sales fell sharply in 2020, and mobile phone sales fell to historical levels in February and March. As domestic production and work resumed in April, mobile phone sales rebounded briefly, and demand in the cobalt market rebounded briefly. Later, affected by the global epidemic, The sales of mobile phones have fallen sharply, and the demand in the cobalt market has gradually declined. The overall performance of the mobile phone market in 2020 is weak, the demand for the cobalt market has plummeted, and the cobalt market is bearish.

3. Domestic new energy vehicle market in 2020

According to statistics from the China Automobile Association, from January to September 2020, domestic production and sales of new energy vehicles have completed 738,000 and 734,000 respectively, a year-on-year decrease of 18.7% and 17.7% respectively. Although the production and sales of new energy vehicles rose month by month, the sales volume of new energy vehicles continued to decline throughout the year. New energy vehicles have limited demand for the cobalt market, and there is no support for the upward momentum of the cobalt market.

4. Import data of cobalt raw materials

According to data from the customs website, China imported 61,200 tons of cobalt raw materials from January to September 2020, a year-on-year decrease of 2%. From January to September, the import volume of cobalt raw materials decreased slightly, and the supply of cobalt decreased slightly. The domestic cobalt market demand was not good, and domestic cobalt traders were generally motivated to import.

5. Market summary

SunSirs data analysts believe that the cobalt market will be volatile in 2020, and the cobalt market will experience several stages of price changes. The first stage, January-February, the pre-epidemic stage, the epidemic has not yet erupted and the outbreak has not affected the national market. The cobalt market is expected to increase demand in 2020 and cobalt prices will fluctuate; the second stage, March-April , The epidemic broke out, domestic production was shut down, cobalt market demand fell sharply, and cobalt prices plummeted; the third phase, May-July, the recovery phase of the cobalt market, with the full resumption of domestic work and production, the domestic cobalt market demand rebounded. The global epidemic broke out, the production and transportation of cobalt ore was restricted, the supply of cobalt ore was declining, the momentum of cobalt prices increased, and the price of cobalt struggled to rise. In order to stimulate economic recovery, China and EU countries have introduced policies to increase the development of new energy vehicles. The global production and sales of automobiles have surged, and global demand in the cobalt market has slowly risen. The stimulus of domestic purchasing and storage news in July completely triggered a surge in cobalt prices; from August to October, 2020, the cobalt market will continue to have positive stimulus news and policies, but the actual demand in the cobalt market has been late It has not seen any improvement. After the struggling performance of the cobalt market in August and September, the cobalt market finally recovered the price at the beginning of the year in October. In general, the demand for the cobalt market will decline in 2020, and the supply will decline, but the overall supply is oversupply, and the cobalt market has insufficient momentum to rise. It is expected that the cobalt price will fluctuate slightly in the future.

Related listed companies: Huayou Cobalt (603799), Hanrui Cobalt (300618), Luoyang Molybdenum (603993).

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