[2019.10.28 minutes of Internal Morning meeting of Cobalt and Lithium New Energy] Cobalt Sulfate Price is significantly loosened and it is difficult to raise Lithium Carbonate Price

SMM, 28 October:

Battery end Market:

Recently, the Ministry of Industry and Information Technology led the drafting of the "New Energy vehicle Industry Development Plan (2021-2035)" (hereinafter referred to as "the plan") outflow, according to the plan, by 2025, new energy vehicle sales accounted for 20% of the total vehicle sales that year; by 2030, new energy vehicle sales accounted for 40% of the total vehicle sales that year. Although the development of the industry in 2019 is lower than expected, the general trend of the development of new energy vehicles is firm and should be optimistic for a long time. Whether it is the double integral policy, or a variety of supporting facilities such as charging pile construction, will produce new benefits and promote the future development of new energy vehicles. We believe that as Tesla and other foreign companies enter the Chinese market, the year-on-year growth rate of new energy vehicles and power batteries will pick up in 2020.

News: BMW Group will change its electric vehicle raw material procurement strategy to eliminate intermediate suppliers in the procurement of important materials such as lithium and cobalt. "We have restructured the supply chain and will start purchasing cobalt and lithium directly from 2020," Andres Wendt, BMW's chief procurement officer, told German media. "

Upstream raw material prices:

Cobalt: the price of electric cobalt in China is the same. The price of the outer plate is stable, the domestic trading situation is not good, wait and see the atmosphere is strong, the northern big factory quotation is firm, the trading price is flat. Cobalt hydroxide, some sellers have a small number of zero single shipment willingness, but downstream worried about the future price fall, lower bidding, the psychological price difference between the two sides is large, the transaction is difficult. Cobalt sulfate price is significantly loose, although the large plant continues to adhere to 60000 customs quotation, but has encountered a price no market. Small and medium-sized manufacturers are worried about the future, some waste raw materials cobalt sulfate prices down 55000 yuan / ton.

Lithium: the current market is in the buyer's market, enterprises in order to ensure customer resources, price reduction is inevitable. In the case of sufficient supply in the market, buyers are not willing to take over high-priced products, industrial grade lithium carbonate price increase is more difficult.

News: Australian lithium miner Galaxy said on Thursday it would scale back its Katrin mine (Mt Cattlin) operations as the industry faces pressure from weak prices and lower-than-expected demand from China. Galaxy said in a statement that it was reviewing the operations of Mount Katrin and expected its production to be reduced by about 40 per cent.

SMM Cobalt Lithium Research team

Hong Lu 021-51666814

Qin Jingjing 021-51666828

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