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Feel The Current Domestic And International Cobalt Market To Result To The Li-ion Battery
Mar 13, 2017

1, the recent rise in the price of cobalt prices


    Following the boom in 2015-2016 lithium carbonate prices, the second half of 2016 until now, domestic and foreign cobalt and cobalt prices related to the rapid rise in the stage, until the deadline, the domestic mainstream enterprises have been reported to the price of cobalt 420,000 yuan / Ton, doubling the same period last year! The international market MB offer 99.3% and 99.8% of the price of cobalt were exceeded 20 US dollars / lb, reaching nearly six years of new high.


    In the 2015-2016 cobalt price bottomed out in the process, the acquisition of the State Reserve played a key role! By the end of 2015 to the end of February 2016, the State Reserve in three batches of storage and storage of 5200 tons of metal cobalt, all from 2016 to start delivery, the end of July delivery, the price of 20 million / ton. By the impact of low prices in recent years, foreign metal cobalt production decline, coupled with the domestic purchasing and storage makes exports to China, a substantial increase in metal cobalt, the international market generally reflects the tight supply of cobalt metal, 2016 domestic cobalt prices are still no improvement before the foreign offer priority Reflecting the optimism. After the completion of the acquisition of the second half of the State Reserve, the domestic funds to move the wind, hope the cobalt market to reproduce the glory of the past.


    In February 2008, the domestic market cobalt price has reached a maximum of 86 million / ton, since the global financial crisis, the free port TFM project put into production a large number of short-term increase in Chinese enterprises overseas investment gradually harvest and so on, cobalt The price of all the way down, 2014 2015, cobalt price of less than 20 million / ton, forced to stop a number of domestic cobalt smelter, surviving the business is like a year.


    "Suddenly the night spring", from the fourth quarter of 2016, the foreign cobalt market swept away the past haze, the current great "spring breeze horseshoe disease, the day to see Changan flower" trend. In the national development of new energy vehicles under the premise of the same, in the pursuit of various funds, as long as the external financial markets without sudden systemic risk, how high the price of cobalt has gone beyond the fundamentals of the category.

2, 2017 global cobalt supply and demand gap


    The total production of cobalt ore in 2016 was 108.7 million tonnes, down 7.2% year-on-year, mainly due to the reduction in supply of Congolese gold mining and the shutdown of some small businesses, but due to the fact that some leading companies Production increased significantly (2016 Glencore Cobalt mine production increased by 23% to 28,300 tons!), Coupled with some enterprises to digest raw materials in previous years, raw materials, 2016 global refined cobalt production of 107,500 tons, an increase of 3.2%. According to the existing enterprise production plan, is expected in 2017 global refined cobalt production of 108,500 tons.


    Cobalt prices rose one of the most basic logic is that new energy vehicles will drive long-term prospects for demand, coupled with the traditional 3C benefit from consumer upgrades, the basic volume will remain 4% -5% increase. Similarly, according to Antaike analysis, 2016 global refined cobalt consumption of 10.38 million tons, an increase of 4.3%, of which the battery industry accounted for 57.7% cobalt, high temperature alloy 15.4%, hard alloy and hard surface alloy 10.8% Other 16.1%. It is expected that global refined cobalt consumption will reach 113,000 tonnes in 2017 and the growth rate will rise to 9.2%, with the largest increase coming from the demand for powered lithium-ion batteries.


    In 2016, the output of cobalt-containing cathode materials increased significantly in the overseas market, with the production of nickel-cobalt-aluminum NCA ternary materials increasing by 84.5% to 26,800 tons. The increase in production was the increase in the production of Tesla's new energy vehicles, demand. But the annual increase in production of lithium cobalt oxide is only 1.27% to 23,700 tons, with cobalt about 14,200 tons, still occupy a dominant position. There are news that Apple will launch Iphone 8 series, the use of dual-cell design, is expected to lead to another increase in lithium cobalt oxide production.


    2016 global cobalt market surplus of 3700 tons, but in 2017 the world may have a gap of 4,200 tons, although in previous years, the basic inventory can make up for the real consumption increase, but based on the future may be the supply and demand gap optimistic estimates, in reality Once the excess narrowing, digest the trend of inventory, the market easily in the short term outbreak. According to China's current development plan of new energy vehicles, by 2020 China's new energy vehicle production will reach 2 million, when China's cobalt consumption alone may reach 65,000 tons, the world will reach 160,000 tons!

3, what impact does the price increase?


    Rapid valuation has caused a great concern in the market, then the future of the industry chain will happen how to change it?


    The rise in cobalt prices is the first to increase the purchasing power of raw materials. From 2016 70% -72% or so significantly increased to 75% -80% of the coefficient, resulting in China's domestic cobalt smelting enterprises, a substantial increase in the cost of procurement of raw materials, and Chinese enterprises if you want to sign a long single with overseas manufacturers, but also must be prepaid 10% of the margin to prevent the price once the Chinese companies default. 2017 those who rely entirely on the purchase of raw materials, the operation of domestic small and medium enterprises will become a problem, the domestic market may once again reshuffle, domestic cobalt enterprises do not continue to strengthen the development of independent tenements in Africa, is still difficult to get rid of overseas mining enterprises Control and pricing of cobalt raw materials.


    From 2008 to the present, although the price of cobalt fluctuations turned upside down, but the global market supply pattern of cobalt raw materials has not fundamentally changed, some large mining enterprises on the market control capacity remains the same, but the downstream consumption pattern has undergone great changes, cobalt The main body of the raw material market from the past between the pure smelter competition to the power battery business intervention, the future does not exclude the mainstream car manufacturers involved, the entire cobalt industry, the ecological chain will change. Long-term look at the terminal car companies and power battery companies involved in the exchange of raw materials will help the smooth, but the short term will increase the market demand for raw materials, and the future of potential car consumption ahead of the raw material market expressed, exacerbated the supply Tense mood.


    Followed by rising prices should stimulate the supply of fast follow-up. But the cobalt production is subject to its by-product characteristics, supply more passive, the increase in production depends on copper and nickel project put into production progress. In 2015, 64% of global cobalt mine production comes from copper, and 34% comes from nickel. In the future, the new nickel project is mainly concentrated in Indonesia, and nickel is produced in the form of nickel ore in the laterite, and the cobalt by-product from nickel production is basically constant. Despite the recent rise in copper prices due to strikes and other events, but the few involved in the copper mine is basically no by-product cobalt. Cobalt supply is still concentrated in the Congo (gold), and to Glencore Mudanta copper and cobalt ore and molybdenum new acquisition of TFM mine. The latter due to just easy to hand owners, nearly 1-2 years of stability overriding, the increase in production is unlikely, 2016 TFM cobalt mine production is only 14,500 tons, compared with 2015 also decreased by 8.8%, showing how much the main project Some influence. Glencore's Mudanta project is designed to produce an annual output of 23,000 tonnes of cobalt metal (crude cobalt hydroxide), but the 2016 production has reached 24,500 tonnes! There is room for future increases. The Kantanga mine and smelter, which was shut down in September 2015, should have resumed production at the end of the first quarter of 2017, but is now delayed by the end of 2017. The increase in cobalt production in the world from 2017 to 2018 will depend on the capacity and willingness of the major producers.


    In 2016, the Congo gold mine production accounted for 63.5% of the total, of which Gary can, Eurasian resources, free port three companies in the Democratic Congo gold cobalt raw material production of about 42,000 tons, although the Eurasian resources Boss Mining project has been in the depletion stage, The RTR tailings project is scheduled to be commissioned by the end of 2018, with a capacity of 1.5-2 million tonnes / year and will be the third largest cobalt production base for Mutanda and Tenke projects, and is the world's most likely increase in production in 2019-2020 Of the project, worthy of attention.


    Will the third price rise cause a large reduction or substitution? As a variety of historical prices have plummeted, in order to avoid the impact of the volatility of the cobalt on the downstream, the demand side can replace the basic has been replaced, the existing consumption is basically rigid. Only the new energy vehicles in the cobalt price downturn in the rapid development of new industries, can withstand the surge in cobalt prices? If by a car with cobalt 10 kg to calculate, then the price of cobalt from 200,000 yuan / ton start, each rose 10 million, the power car to bring the cost of 1,000 yuan increment, the Tesla this luxury car Level is undoubtedly digestion, in terms of ordinary new energy vehicles, it seems a bit difficult to judge, especially the Chinese market is the policy-led new energy vehicle demand, and shake the number and easily hundreds of thousands of dollars in terms of fees, it seems The cost increase of several thousand dollars is also less than mention, but once there is no such mandatory policy support, the real market demand how to wait and see.


    The last price increase may stimulate recovery. For cobalt this expensive metal is concerned, the global recycling of resources are very important, and its main application areas, such as high-temperature alloys, carbide recovery system is very mature. But the resource recovery rate depends on the price, especially for the cemented carbide and battery industry, because these industries are more dispersed, resource enrichment requires price incentives. With the cobalt price continues to be high, the next step in the corners of the community of cobalt-containing materials will gradually surfaced, increase supply, thereby inhibiting excessive price increases.