According to the data monitoring of the business agency, the price of cobalt rose in May, and the market continued to pick up. As of May 31, the price of cobalt was 255666.67 yuan / ton, up 6.31% from the average price of 240500.00 yuan / ton at the beginning of the month. Cobalt market rose sharply in May.
Mobile phone sales increase
According to the data of China Academy of communications, in April 2020, the total shipment volume of domestic mobile phone market was 41.728 million, a year-on-year increase of 14.2%, and the mobile phone sales volume in April was the highest in 19 years. In April, the sales volume of mobile phones rose sharply year-on-year, and the demand for mobile phones picked up, supporting the demand for cobalt market.
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Production and sales of new energy vehicles are picking up
According to the statistics of China Automobile Industry Association, in April 2020, the production and sales of new energy vehicles were 80000 and 72000 respectively, with a growth rate of 31.6% and 9.7% on a month on month basis, down 22.1% and 26.5% on a year-on-year basis. Although affected by the decline of subsidies, the production and sales of new energy vehicles fell significantly in April compared with the same period last year, but on a month on month basis, the domestic market environment for new energy vehicles has significantly recovered, the demand for cobalt market has increased, and the price of cobalt has increased.
Policy related
According to Bloomberg, the European Commission will promote the transformation of the automotive industry to electric vehicles, and the European Commission is considering providing incentives to automakers to encourage them to produce and sell clean cars. The policy promotes to stimulate the development of electric vehicle market and increase the demand of cobalt Market in the future.
At 9 a.m. on May 22, the third session of the 13th National People’s Congress opened, and Premier Li Keqiang made a report on the work of the government. It is proposed in the report that it will focus on supporting the development of a new generation of information networks, expanding 5g applications, building charging piles, promoting new energy vehicles, stimulating new consumer demand, and promoting industrial upgrading. To promote the development of new energy vehicles is the basic policy of the country, but the decline of state subsidies forces the upgrading of new energy vehicle industry. During the upgrading of new energy vehicle industry chain, the demand of cobalt market will slow down, and the policies to promote the development of new energy vehicles have limited benefits for cobalt market.
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Market Overview
According to Bai Jiaxin, a data analyst of business agency, the sales volume of mobile phones and new energy vehicles increased sharply in April, and the demand for cobalt recovered. In May, the price of cobalt continued to rise. The EU’s policies to promote the development of new energy vehicles and the government’s report on the development of new energy vehicles in the National People’s Congress are good for the future cobalt market. Overall, the positive news of cobalt Market in May continued to stimulate the rise of cobalt price shocks.
But behind the good news in May, there is always a taste of false prosperity, and there is still a risk of decline in the future cobalt market. The sales volume of new energy vehicles and mobile phones increased significantly in April, partly because of the retaliatory consumption caused by the backlog of early consumption, which is not sustainable. It is expected that the consumption will return to normal at the end of May, or even some weakness will occur. However, it is difficult to achieve real growth in the short term due to favorable policies and weak global demand. According to Bloomberg new energy finance and economics forecast, global electric vehicle sales will decline by 18% to 1.7 million in 2020 compared with the same period last year, while global mobile phone sales are expected to decline by at least 10%. The sales of new energy vehicles and mobile phones are expected to decline, the demand of cobalt market is expected to fall sharply, and the short-term demand recovery is hard to hide the lack of market demand.
In general, may cobalt market was stimulated by good news, and the price of cobalt rose in shock. However, the rising momentum of future cobalt market is insufficient, and it is expected that the price of cobalt will be stable in June.
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