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The recent sharp rise and fall in cobalt prices highlighted the contradictory psychology of the cobalt market


1、 Trend analysis


According to the data monitoring of the business agency, the cobalt price has risen sharply and fell sharply recently, and the overall cobalt price has fluctuated slightly. As of December 13, the cobalt price quotation was 259666.67 yuan / ton, down 0.45% from the average cobalt price quotation of 260833.33 yuan / ton at the beginning of the month (December 1), and down 25.63% year-on-year from the same period last year.

2、 Market analysis

(1) Analysis of cobalt price trend in December

As can be seen from the trend chart of domestic cobalt price, the cobalt price fell slightly in early December, following the previous decline, and then stimulated by the positive news of the cobalt market, the cobalt price began to pick up; However, the cobalt market reacted generally to the positive stimulus, the demand of the cobalt market did not improve in the short term, and the performance of the new energy vehicle market was poor. With the decline of the international cobalt price, the domestic cobalt price followed the sharp decline; However, the sharp decline in cobalt prices exceeded the market expectations, and cobalt prices began to rebound. As of December 13, cobalt prices rebounded to 259666.67 yuan / ton. The volatile performance of cobalt prices reflects the contradictory psychology of the cobalt market. It can also be seen that the recent domestic cobalt price is close to the psychological expectation of cobalt market enterprises.

(2) Good news

Glencore mutanda copper cobalt mine entered the maintenance period on November 26, officially fulfilling the guaranteed price of the mine. It is expected that the supply of cobalt mine will decrease in the future.

On November 28, 2019, the Ministry of industry and information technology organized the liaison meeting of the inter ministerial joint meeting on energy conservation and new energy vehicle industry development to discuss the "new energy vehicle industry development plan (2021-2035)".

The German government announced an increase in subsidies for new energy vehicles. The German government plans to increase subsidies for electric vehicles by half in the five years from 2020. Germany has made frequent moves in the electric vehicle plan. In Volkswagen's strategic plan for the next five years, new energy vehicles will be one of the key investment projects, and BMW Group will expand its procurement of power batteries in Ningde times.

China's Ministry of industry and information technology announced Tesla's volume production license on its website. Tesla officially began mass production of model 3 made in China.

(3) Bad news


The November production and sales data released by the China Association of automobile manufacturers showed that in November, the production and sales of new energy vehicles were 110000 and 95000 respectively, a year-on-year decrease of 36.9% and 43.7% respectively. From January to November, the production and sales of new energy vehicles reached 1.093 million and 1.043 million respectively, with a year-on-year increase of 3.6% and 1.3% respectively. Under the background of the recovery of automobile production and sales in November and the recovery of positive year-on-year growth, the performance of new energy vehicles is obviously not satisfactory to the market.

According to the data of China Academy of communications technology, in November 2019, the overall shipment volume of the domestic mobile phone market was 34.842 million units, a year-on-year decrease of 1.5%; From January to November 2019, the overall shipment volume of the domestic mobile phone market was 358million, a year-on-year decrease of 5.4%. The sales of mobile phones fell, and the demand of cobalt market was still weak. Although the supply of cobalt ore was expected to decline, the supply-demand relationship of oversupply had not been fundamentally changed.


From the LME spot price chart, it can be seen that the international cobalt price has fallen sharply recently, which is bad for the domestic cobalt price.

3、 Outlook

Baijiaxin, a data analyst at the business news agency, believes that the recent news has been all over the world, and the cobalt price has fluctuated from high to low under the stimulation of various news, showing the contradictory psychology of the market towards the cobalt market. Glencore's cobalt mine shut down, and the supply of cobalt mine is expected to decline. From the development plan of the Ministry of industry and information technology for the next five years, it can be seen that new energy vehicles are still the future development direction of China's automobiles, and the demand for cobalt will continue to increase in the future. Although major automobile manufacturers have frequently sold in the new energy vehicle market recently, the demand for cobalt at this stage is not obvious, on the contrary, the sales of new energy vehicles and mobile phones continue to decline, The recovery of cobalt demand seems out of reach. The domestic market has a more rational view of cobalt prices. Although there have been various positive news stimulation recently, under the condition that the relationship between supply and demand has not been significantly improved, traders' enthusiasm for stocking is limited, and cobalt prices are difficult to find high price support. As the new year is approaching, the hype funds may enter the market less. On the contrary, cobalt traders may ship at a low price due to financial pressure, resulting in a decline in cobalt prices.

Generally speaking, the demand of cobalt market has not changed significantly, and the market investment is more cautious. Although there are various good news stimulation recently, the cobalt market is difficult to rise at a high speed in the early stage, and there is little possibility of large investment funds entering the cobalt Market in the near future; As the new year approaches, the market liquidity pressure increases. In order to alleviate the financial pressure, some cobalt enterprises may ship at a low price before the year, resulting in a sharp decline in cobalt prices in the market. In the long run, the cobalt market is bound to warm up and rise, and the cobalt price is bound to rise. Owning a cobalt warehouse will make greater profits in the future; In the short term, for the future survival and development of enterprises, low-cost cobalt inventory may be the best choice for enterprises. The recent sharp rise and fall in cobalt prices may be the difficult choice of enterprises under this ambivalence.

Article source:Battery net

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