I. trend analysis
According to the data monitoring of the business agency, the price of cobalt fell sharply this week. Although Glencore stopped production in advance, it was still difficult to change the weak trend of the cobalt market, and the price of cobalt fell in shock. As of November 30, the price of cobalt was 260833.33 yuan / ton, down 2.49% compared with the average price of 267500.00 yuan / ton at the end of last week (November 22), and down 29.55% compared with the same period last year.
II. Market analysis
Glencore closed mutanda copper and cobalt mine in advance
Due to the insufficient supply of sulfuric acid, mutanda copper cobalt mine entered the maintenance period ahead of schedule on November 26. So far, the event of price protection for nearly 4 months has been officially realized. The shutdown of Glencore copper and cobalt mine has certain impact on the supply of cobalt. The supply of cobalt in the future market is expected to decline, which is good for the price of cobalt. Glencore still has inventory sales, there will be no shortage of cobalt supply, and the upward momentum of cobalt market is limited.
New energy vehicle sales decline
According to the new energy vehicle production and sales data released by China Automobile Industry Association in October, the production and sales of new energy vehicles completed 95000 and 75000 respectively, down 35.4% and 45.6% compared with the same period of last year. From January to October, the production and sales of new energy vehicles completed 983000 and 947000 respectively, an increase of 11.7% and 10.1% over the same period of last year. At present, the new energy market is still in the adjustment period after the recession. With the impact of the low price of second-hand new energy vehicles, the sales volume of new energy vehicles not only fell sharply compared with last year’s sales volume, but also fell in October compared with September’s sales volume. The recent downturn performance of new energy vehicles has a huge impact on the cobalt market. The recent demand decline of the cobalt market has a negative impact on the cobalt market.
Domestic mobile phone shipments fell month on month
According to the data of China Academy of communications, in October 2019, the total shipment volume of domestic mobile phone market was 35.969 million, down 6.7% year on year and 0.7% month on month; in January October 2019, the total shipment volume of domestic mobile phone market was 323 million, down 5.8% year on year. The sharp decline of mobile phone sales shows the weak demand of cobalt Market in the near future. Under the condition that the supply of cobalt market remains unchanged, the downward pressure of cobalt market is greater.
III. future prospects
According to Bai Jiaxin, a data analyst at business club, Glencore closed the cobalt mine ahead of time, which objectively affected the supply of cobalt Market in the future. The supply of cobalt market is expected to decrease. However, as Glencore still has cobalt stock sales, it is difficult to determine the amount of cobalt market supply reduction. The sales of new energy vehicles and mobile phones continued to be depressed, and the demand for cobalt fell significantly. The oversupply of supply and demand in the cobalt market will not be improved in the short term due to the shutdown of Glencore. With the annual close, cobalt traders sold cobalt stocks at a low price in order to relieve the capital pressure, which is also the reason why the price of cobalt continued to decline in the near future. Glencore’s production reduction did not bring enough confidence to the cobalt market, and the downstream enterprises of cobalt did not have enough pressure to prepare goods in advance. Generally speaking, the shutdown of Glencore has not fundamentally changed the weak market of cobalt market, and the driving force for the rise of cobalt price is limited. However, with the continuous impact of the decrease of Glencore’s Cobalt supply and the recovery of new energy vehicles and 3C market, the price of cobalt is bound to rise, and the space for the fall of cobalt price is limited. It is expected that the price of cobalt in the future will be stable, and the price of cobalt in December may be slightly warmer