SunSirs: Caused by the Continued Decreased of New Energy Vehicles, Cobalt Prices Dropped Panically

SunSirs: Oct 15

1. Prices Trend

According to data from SunSirs, after the festival, domestic cobalt prices fell sharply. On Oct 14, the price of cobalt was 286,500.00RMB/t, 4.61% lower than the the average price of Oct 1 (300,333.34RMB/t). In September, the poor performance of new energy vehicles triggered panic in the cobalt market, and the prices fell.

2. Market Analysis

1) The rise of international cobalt prices slows down

MB cobalt prices tend to stabilize. The prices of MB cobalt rose slightly in October, the international cobalt prices are still in the increasing stage. However, its driving effect on domestic cobalt market weakened, the domestic cobalt prices have lost the momentum of growing.

Cobalt prices increased in LME Market. The prices of cobalt in LME market have swung lower since the end of September. The fall of international cobalt prices is bad for the domestic ones, and the downward pressure of domestic cobalt market has increased.

2）Sales of new energy vehicles fell 16% year on year in September

According to the data released by China Automobile Industry Association, the sales volume of new energy vehicles in September was 80,000, 34.2% lower year on year, which has been down for three consecutive months. From January to September, the sales volume of new energy vehicles reached 872,000, a year-on-year increase of 20.8%, but the growth rate was significantly lower than that from January to August. In September, the sales volume of pure electric vehicles was 63,000, a year-on-year decrease of 33.1%; the sales volume of plug-in hybrid vehicles was 17,000, a year-on-year decrease of 38.4%. From January to September, the sales volume of pure electric vehicles was 692,000, a year-on-year decrease of 27.8%; the sales volume of plug-in hybrid vehicles was 179,000, a year-on-year decrease of 0.8%; the sales volume of fuel cell vehicles was 1,251, increasing 7.6 times year on year. The sales volume of new energy vehicles fell for three months in a row, with an increasing trend of decline. The sales volume of new energy vehicles did not recover. There was a certain negative voice in the market, and the prospect of new energy vehicles in cobalt market was expected to decrease in the future. The decreased market demand is negative to the cobalt market.

3. Prospects for the Future Market

A data analyst from SunSirs believes that international cobalt prices fall again, which will have a negative impact on the domestic cobalt market, and the domestic cobalt prices are under pressure and have insufficient upward momentum. In terms of demand, new energy vehicles fell sharply year on year for three consecutive months. The market of new energy vehicles did not improve and the decline was expanding, which triggered panic in the domestic cobalt market, and the domestic cobalt prices fell sharply. But in the future, new energy vehicles are still the trend in the future. 5G products are full of growth momentum. The supply agreement between Glencore and GEM widenens the gap caused by the reduction of production. The reduction of market mobile cobalt inventory has a certain positive impact on cobalt prices. Generally speaking, cobalt market has no obvious upward momentum in the near future, and the downward pressure is increasing. But the prospect of future cobalt market is still promising, and the increase of cobalt cost also determines the limited decreasing space for cobalt prices. It is expected that the future cobalt prices will fluctuate broadly and maintain stability.

Relevant listed companies: Huayou Cobalt Industry (603799), Nanjing Hanrui Cobalt Co., Ltd.  (300618) and China Molybdenum Co., Ltd. (603993).

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