[2020.04.23 Summary of the Internal Morning meeting of Cobalt and Lithium New Energy] the price of upstream raw materials loosened after a large battery manufacturer reduced its production orders.

23 April:

Battery end Market:

In the power market, the shutdown of overseas European and American car companies affects the production and export of the global head battery factory. At present, the domestic head battery factory reduces the production of high nickel orders by 50%, affecting the demand for ternary materials in the whole power market. Other power battery plants basically only supply domestic automakers, so orders increased slightly in April from March. In the consumer market, consumer goods and consumer batteries exported to Russia, India, Europe and the United States and other countries have been basically cancelled or delayed indefinitely, which has a greater impact on consumer battery factories, and is expected to reduce production by about 30 percent in April. Recently, only electric bicycle products have increased significantly in the domestic consumer market, mainly due to the increase in the demand for lithium batteries for shared bicycles such as Meituan.

Upstream raw material prices:

Cobalt: the market has been calmer this week, and downstream has begun to carry out purchase inquiries for May one after another. Cobalt salt, cobalt oxide manufacturers this week "offer" is still strong, the main support is the high cost of raw materials and import difficulties. However, because the order of downstream lithium cobalt acid will be reduced in May, the price of cobalt oxide is loose, and the price of cobalt sulfate is also loosened, mainly due to the strong bargaining power of downstream power battery factory and ternary material factory. The market continues to focus on whether South Africa will lift the ban by the end of the month to judge the next production and quotation strategy.

Lithium: the overall demand of the current market is not good, transactions are sporadic. Battery grade lithium carbonate transaction is weak, downstream may be willing to lower slightly on the basis of the current price range to lock in the long order, the two sides play a positive game on pricing. Industrial grade lithium carbonate low prices continue to probe, the manufacturer said that if the buyer is willing to cash transactions or large quantities of transactions, the price still has 500-1000 yuan / ton concessions. Lithium hydroxide, in May, Japan and South Korea material factory orders are uncertain, and domestic demand is weak, downstream may have the idea of lower prices, domestic battery lithium hydroxide prices may be loose.

Cathode materials and precursors: due to the reduction of orders from large domestic power battery factories, the April orders of large ternary materials factories have been affected; other small and medium-sized factories have seen a small increase in power orders this month. The impact of production cuts in the consumer market on ternary materials will basically begin in May. Recently, the price of digital ternary materials has begun to decline, and the market quotation is chaotic. Due to the decline in exports from Japan and South Korea and the poor performance of the domestic power and consumer market, the price of digital ternary precursor 523 has basically fallen to 70,000 and below recently, and the profit space of ternary precursor enterprises has been squeezed continuously.

Nickel: electrolytic nickel prices fluctuate, superimposed downstream ternary materials orders continue to weaken in May, this week nickel sulfate prices are also under pressure for a small correction, the market is sporadic.

News:

1. [Guoxuan Hi-Tech responded to rumors of Volkswagen's 5.2 billion yuan stake: no agreement has yet been reached] on the evening of April 22, in response to the news that "Volkswagen Group 5.2 billion will take a stake in Guoxuan Hi-Tech," Guoxuan Hi-Tech issued a notice saying: it is still discussing with Volkswagen on possible strategic cooperation in technology, products, capital, and other aspects in the future. And no agreement has been reached on specific aspects such as the specific mode, content and price of cooperation, let alone any substantive and binding agreement, commitment or other arrangement on the relevant matters of cooperation.

2. [BYD Han opens scheduled to carry a new "blade" battery] on April 20, according to the latest official news from BYD, BYD officially opened the reservation. The new car is available in both EV (pure electric) and DM (plug-in hybrid) versions, with a starting price of 290000 yuan, which is expected to go on sale in June this year. On the power side, BYD EV will offer single-motor two-wheel drive and dual-motor four-wheel drive models, with three NEDC mileage versions, 506km, 550km and 605km.

3. The Ministry of Finance and other three ministries: from January 1, 2021 to December 31, 2022, the purchase of new energy vehicles will be exempted from the purchase tax. New energy vehicles exempted from vehicle purchase tax refer to pure electric vehicles, plug-in hybrid (including incremental) vehicles, fuel cell vehicles.

SMM Battery Materials Research team

Hu Yan 021-51666809

Qin Jingjing 021-51666828

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818