A weekly update on the trending stories from the New Energy sector. 

Inventories of domestic cobalt raw materials have declined 7,200 mt with metal content since January 2021. The supply shortage in Q1 stood at 5,100 mt of metal content and at 2,100 mt of metal content in Q2 which has eased on a quarterly basis.

Supply of industrial-grade lithium carbonate has begun to decline since October, while demand for LFP and LMO has increased rapidly, resulting in supply deficit and lifting its prices significantly. Chinese importers have signed large volume of orders, but imported cargoes will not arrive until two months.

On November 2, the highly-anticipated Development Plan for the New Energy Vehicle Industry (2021-2035) was unveiled, which was not only a good news for the new energy vehicle (NEV) industry, but also a boost to cobalt demand.

According to SMM survey, cobalt prices trended lower in September-October but have stabilised recently. Inquiries for cobalt raw materials and trades rose. A small number of producers reported that they planned to delay the arrivals of raw materials at ports from September to early October, and the overall arrivals are expected to rise from October to November.

CATL is likely to see 33 GWh of high-Ni ternary battery demand in 2021, translating into approximately 58,000 mt of high-Ni ternary material orders, a sharp increase from 2020.

Battery-grade lithium carbonate prices are expected to rise slightly in early September as large-scale producers intend to raise prices as downstream users step up procurement. Battery-grade lithium hydroxide prices are likely to hold stable.

Prices of cobalt are expected to further retreat this week as the arrival of cheap cobalt raw materials impacts the domestic spot market and grow cobalt salt producers inclination to destock. 

According to statistics from the United States Geological Survey in 2015, the world's proven land cobalt resources were about 25 million mt, with reserves of 7.2 million mt. The Democratic Republic of Congo, Australia and Cuba accounted for 68% of the global cobalt reserves. Congo (Gold) is the country with the most abundant cobalt reserves. As of 2014, cobalt reserves in Congo stood at 3.4 million mt, accounting for more than 50% of the world’s total.

Demand for lithium iron phosphate (LFP) batteries in the new energy vehicle market, which enjoy more cost advantage as compared to high-nickel ternary batteries, will likely increase with support from the latest 2020 NEV subsidy policy, under which only passenger cars costing less than 300,000 yuan/unit will receive subsidies.