Supply reduced and demand increased. In May, domestic cobalt prices stopped falling and rose

Domestic cobalt prices rebounded and rose in May


Gamma-PGA (gamma polyglutamic acid)

According to the cobalt market analysis system of Business Society, the cobalt price on May 31st was 226000 yuan/ton, an increase of 6.05% compared to the fluctuation of cobalt price of 215600 yuan/ton on May 1st. Stimulated by the news of collection and storage, demand has risen in the short term, overseas cobalt mining plants have reduced production, cobalt market supply expectations have decreased, supply reduction and demand have increased, and cobalt prices have stopped falling and rising in May.


Expected increase in demand


According to data released by the China Academy of Information and Communications Technology, in April 2024, the domestic market shipped 24.071 million mobile phones, a year-on-year increase of 28.8%. From January to April 2024, the domestic market shipped 91.486 million mobile phones, a year-on-year increase of 12.3%. The domestic mobile phone market is recovering, and the demand for cobalt in the domestic mobile phone market is expected to rebound.


IDC, an international data information company, pointed out that global smartphone shipments are expected to increase by 4.0% annually to 1.21 billion units in 2024. According to a report released by market research firm Canalys, global smartphone shipments increased by 11% year-on-year in the first quarter of 2024. The global smartphone market rebounded in the first quarter, and compared to the same period in 2023, the economic pressure and sluggish situation have improved. The increase in mobile phone shipments has led to a recovery in demand for cobalt in the global mobile phone market.


The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Agriculture and Rural Affairs, the Ministry of Commerce, and the National Energy Administration jointly organized the 2024 New Energy Vehicles Going to the Countryside Campaign. From May to December 2024, support policies such as exchanging old cars for new ones and filling gaps in county-level charging and swapping facilities will be implemented to directly reach consumers with “real gold and silver” discounts. The sales of new energy vehicles are expected to increase, and the demand for cobalt in the market is expected to rise. In addition, the news of storage and recovery has stimulated confidence in the cobalt market, increasing the driving force for the rise of cobalt prices.


According to market insiders, the State Reserve intends to purchase approximately 15000 tons of cobalt to increase its inventory for new energy batteries and aerospace alloys. China purchased 2000 tons of cobalt as a strategic commodity reserve in 2020, and the scale of this collection far exceeds that of 2020. The demand for cobalt in the market has increased significantly in the short term, and the supply of cobalt in the market is insufficient in the short term, increasing the pressure on cobalt prices to rise.


Morocco’s largest mining company, cobalt mine, has reduced production


According to the data released by Managem, Morocco’s largest mining company, the output of Bou Azzer cobalt mine in the Atlas Mountains has decreased due to the downturn of cobalt prices in the international market. Due to the decline of cobalt output, the company’s revenue in the first quarter of 2024 will decline by 13% to 194 million dollars.


Overview and Outlook


According to data analysts from Business Society, with the stimulation of national policies and an increase in sales of new energy vehicles, coupled with the stimulation of storage and recovery news, the demand for cobalt in the market has increased, international cobalt production has decreased, and the supply of cobalt in the market has weakened. Overall, the cobalt market has seen a decrease in supply and an increase in demand, but the sustained increase in demand is insufficient. Although the supply has declined, overall oversupply remains. It is expected that cobalt prices will stabilize in the future.