SHANGHAI, Jul 6 (SMM) – In the sector of new energy, the prices of cobalt metal have attracted much attention, as it entered the downward trajectory since the beginning of 2022 from a high of 120,000 yuan/mt.
As for the reason for the price decline, SMM believes that it is mainly because the pandemic in the first half of the year seriously suppressed the demand and consumption, thus leading to the decline in cobalt prices.
According to SMM's statistics on monthly production and supply-demand balance of cobalt sulphate, the scheduled production of cobalt sulphate in May dropped 29% compared to April partly because the impact of the floods in South Africa made the arrival of imported intermediate products lower than expected. On the other hand, the impact of the pandemic in Shanghai on the automotive industry as well as the NMC materials and precursor sectors directly pulled down the consumption of cobalt sulphate.
In response to forecasts for production schedules in June and July, SMM believes that cobalt sulphate production will increase 6% MoM in June and 8% MoM in July. The forecast is so made based on the fact that the improving pandemic situation in Shanghai has revived the demand for precursors and subsequently cobalt sulphate. But as the actual demand is slower than expected, hence it is expected that the production in June and July will rise only slightly MoM.
From the monthly supply-demand balance of cobalt sulphate, it can be seen that although in May, the market saw a small deficit of 182 mt, it will turn into a narrow surplus in June and remain relatively balanced in July.
Looking at the price trend of cobalt sulphate, as the demand recovery of the new energy vehicle segment is not as expected and the consumer electronics industry has also entered the off-season, the prices of cobalt sulphate will continue to go down. As for the price trend of cobalt in the short term, SMM believes that the prices may stabilise or decline slightly.
With the official recovery in Shanghai from the latest breakout of COVID, the demand for NMC materials and LFP has been recovering as well. Based on SMM statistics, in June, China's monthly output of NMC materials and LFP both achieved palpable growth compared with May. By contrast, the monthly output of LFP grew more quickly than that of NMC materials, with the former June recording a MoM growth of 23% in May and an estimated slower-than-expected MoM growth of 15% in June; while the growth rate of NMC materials is also less than expected, which will be lower than 10%.
Currently, the new energy vehicle sector is recovering smoothly. However, because the new energy vehicle production is easily affected by the weather conditions and production line conversion, the manufacturers have been unable to run at full capacity. Meanwhile, the transmission across the new energy vehicle chain from the terminal end to the raw material side will take a long time, hence the consumption of NMC and LFP materials is still less than expected.
And from the production of NMC and LFP materials, since the middle of 2020, LFP took over NMC materials with greatest production for the first time. Although the market has been disturbed by the outbreak of pandemic from January to May, and the production of NMC and LFP materials declined to varying degrees, LFP production has grown more rapidly than NMC materials after the pandemic subsided.
In terms of future growth potential, SMM believes that LFP carries greater potential than NMC materials. And based on a full-year forecast, it is estimated that the proportion of LFP production will gradually climb this year to a level of 60-65% in 2022, and will keep increasing in 2023.
![[SMM Analysis] Anoda Grafit Buatan Sedikit Naik Sebelum Liburan, Secara Keseluruhan Stabil Selama Liburan](https://imgqn.smm.cn/usercenter/MjfPv20251217171728.jpg)
