[SMM Analysis] weak 3C Electronic orders Cobalt tetroxide and Lithium Cobalt oxide Price under pressure

March 31: due to the spread of the global epidemic, the Chinese market lithium cobalt acid and downstream 3C electronic market demand is also gradually reduced. In the past, domestic digital battery manufacturers generally began to inquire about raw materials at the end of each month, and completed the procurement of raw materials one after another at the beginning of next month, but the procurement time of lithium cobalt sulfate and cobalt oxide was delayed this month, and the current market is deserted. The operating rate of manufacturers has not continued to climb the slope for the time being. Due to the weak orders in the downstream digital market, the prices of cobalt oxide and lithium cobalt oxide manufacturers have also been loosened, and some of the quotations have fallen one after another, at 185000 yuan / ton and 215000 yuan / ton, respectively.

The overseas market for power batteries and new energy vehicles has responded more quickly to the epidemic than the digital market, with some battery factories and car companies shutting down production and cutting production since early March. In the digital market, Apple said in mid-March that it would close all stores except Greater China. Outbreaks in places such as Africa and India were also spreading, orders in overseas mobile phone markets were falling and demand for lithium cobalt began to show signs of weakening.

A SMM survey of a lithium cobalt producer in southern China understands that the company expects to produce only about 14001500 tonnes of lithium cobalt in March because of a decline in downstream orders, and that downstream orders were "belated" in April. Due to weak demand, the company also depressed the purchase price of cobalt oxide, and is expected to eventually close at a price of less than 180000 yuan / ton. Lithium carbonate prices have also fallen, and lithium cobalt is expected to fall to about 210000 yuan a tonne in early April. A cobalt oxide producer in East China also said that orders for lithium cobalt oxide downstream were weak, and the company also reduced its operating capacity after the reduction in orders for cobalt oxide. Although the current offer is 18-185000 yuan / ton, it is expected that the new order may be less than 180000 yuan / ton.

Given that the global new crown virus epidemic is still not fully under control, 3C electronic and e-cigarette orders in overseas markets are likely to decline, and the domestic market will not be able to support price increases. SMM believes that prices of cobalt trioxide and lithium cobalt oxide will decline slowly this week.

SMM Cobalt Lithium small Metal Research team

Hu Yan 021-51666809

Qin Jingjing 021-51666828

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818