Recently, due to the impact of the epidemic, logistics is blocked, the inventory of raw materials in the upstream of the battery is urgent, and the prices of cobalt, lithium hydroxide and nickel sulfate have increased. However, due to the epidemic and off-season factors, the downstream demand has not improved, and it is expected that it will be difficult to support the continuous upward price of cobalt and lithium.

In addition, the 2019 performance express of lithium battery industry chain enterprises has entered an intensive disclosure period. According to the statistics of battery network, the performance of listed companies of lithium cobalt resources is generally green.

Downward price and green performance

In terms of lithium resources, Rongjie shares, Tianqi lithium, Ganfeng lithium, Yahua group and jiangte electric have disclosed the performance express, but the net profits of these five enterprises have fallen sharply, among which, Rongjie shares fell by 4119.73% and Tianqi lithium also reached 228.36%.

According to the performance express of the above five enterprises, the common reason for the decline in performance is the sharp decline in product prices: the price of lithium ore and lithium salt products decreased significantly compared with 2018, and the profit space of lithium industry was greatly compressed; Based on the principle of prudence, the corresponding impairment provision is made for the inventory of lithium industry.

At the same time, factors such as "reduction of long-term equity investment", "decline in the stock price of financial assets", "provision for goodwill impairment" have also led to the decline in the performance of relevant enterprises and even huge losses.

In terms of cobalt resources, Hanrui cobalt and Dow technology have disclosed their performance bulletins, but the net profits of the two companies have fallen by more than 90%.

Hanrui cobalt said that in 2019, due to changes in the market environment, the price of cobalt metal fell sharply year-on-year, the gross profit margin of the company's cobalt products decreased, and the total operating income, operating profit, total profit and net profit decreased significantly during the reporting period.

Dow technology said that in the first half of 2019, the price of cobalt products fell rapidly, resulting in the decline of net realizable value of inventory. Based on the principle of prudence, the company made inventory depreciation reserves for inventory during the reporting period, which had a great impact on the profits of Dow technology.

Battery network also noted that although some enterprises have not disclosed the performance express, it is not optimistic from the previously disclosed performance forecast.

According to the performance forecast released by Huayou cobalt, the company expects the net profit attributable to shareholders of listed companies excluding non recurring profits and losses in 2019 to decrease by 87% to 97% compared with the same period last year.

Luoyang molybdenum industry is expected to achieve a net profit of 1.7 billion to 2 billion yuan attributable to shareholders of Listed Companies in 2019, a year-on-year decrease of 2.636 billion to 2.936 billion yuan, a decrease of 56.86% to 63.33%.

In terms of market price, according to the data monitoring of business agency, the price of lithium carbonate showed a downward trend in 2019 as a whole. Although prices fell in the first half of the year, the decline was slightly flat. The market price of lithium carbonate fell sharply in the second half of the year, and there was no positive phenomenon until the end of the year. In addition, although the cobalt Market in 2019 is not as hot as that in 2017 and 2018, it can still be regarded as a sharp rise and fall.

Demand slows down, long-term improvement

While the product price is declining, the growth rate of lithium cobalt market demand also began to slow down in 2019. According to the calculation of Antaike, the global demand for lithium in 2019 is expected to reach nearly 300000 tons (lithium carbonate equivalent, the same below), but the annual growth rate slowed down by 10.6ppt to 7.5% (of which the battery contributed about 5.7ppt). Lithium demand in the battery sector was 155000 tons, up about 11% year-on-year (of which new energy vehicles contributed 10.7ppt and consumer electronics contributed about 0.6ppt), but the growth rate slowed down by 17ppt year-on-year; In 2019, the global refined cobalt consumption reached 134000 tons, up 6% year-on-year (of which the battery contributed about 5.4ppt), but the growth rate slowed down about 4ppt year-on-year. Cobalt consumption in the battery sector reached 84000 tons, up 9% from 2018 (of which new energy vehicles contributed about 6ppt and consumer electronics contributed about 3ppt), but the growth rate slowed down by about 7ppt year-on-year.

What will be the market demand and price trend of cobalt and lithium in 2020?

Since 2018, a large number of new lithium production capacity has been put on the market all over the world. At present, the lithium carbonate market inventory is still in stock. Bloomberg New Energy Finance (bnef) released the global lithium market outlook 2020-2030 on February 27, saying that after lithium salt manufacturers delayed their capacity expansion plans in 2019, the lithium market is expected to restore supply and demand balance in 2020. If China's electric vehicle market unexpectedly recovers strongly in the second half of this year, lithium salt prices may rise. However, if the impact of the covid-19 epidemic continues until the second quarter of this year, the price of lithium carbonate may fall below $7000 / ton. Bnef predicts that the lithium market demand (including battery and non battery demand) will be 2million tons of lithium carbonate equivalent in 2030, and the lithium concentrate production capacity under construction is difficult to meet such a large demand. Bnef estimates that lithium salt manufacturers need to invest an additional $25-30 billion in the next decade to meet the market demand in 2030.

CITIC Securities believes that since 2020. Affected by the improvement of the supply and demand pattern of the cobalt industry and the domestic epidemic, the prices of cobalt oxide, cobalt sulfate, cobalt chloride and other products increased by more than 20% compared with the beginning of the year, which also verified the low inventory status of downstream enterprises. As the cobalt industry enters the traditional peak procurement season, the price of cobalt products is expected to maintain an upward trend and continue to be optimistic that the price of cobalt will rise to 350000 yuan / ton.

Tianfeng Securities believes that with the follow-up comprehensive resumption of cathode material factory and the recovery of logistics, the cobalt price brought by replenishment is expected to continue to rise, and the lithium hydroxide price required for high nickel cathode is expected to be strong. On the overall supply side, the liquidation of lithium resources is expected to accelerate, the price of lithium concentrate is expected to stabilize, and the marginal profit of lithium salt processing is expected to improve.

Conclusion:According to the latest data released by the National Health Commission today, 202 new confirmed cases of COVID-19 were reported nationwide on March 1, including 196 new cases in Hubei. The newly confirmed cases in other provinces except Hubei have been in single digits for four consecutive days. Meanwhile, the number of new deaths on March 1 was 0.

The epidemic prevention and control situation has improved. At present, the operating rate of large battery manufacturers has basically reached 60%, but the first quarter is a low season for the demand for cathode materials, and the logistics conditions are also improving. In general, the lithium cobalt resource industry will still bear great pressure in the first quarter and even the first half of the year.

Article source:Battery net