[2020.04.16 minutes of Internal Morning meeting of Cobalt and Lithium New Energy] there is still downward pressure on the prices of sporadic cobalt and lithium raw materials in the cathode materials market.

16 April:

Battery end Market:

In the power market, the domestic epidemic situation has improved, the production and sales of car enterprises have gradually increased, and many car companies have adopted the strategy of live broadcast or offline price reduction, coupled with government subsidies to promote car sales. As a result of preventive measures such as port blockades in overseas countries, battery exports have been blocked, with some large power battery factories accounting for 2-3 percent of overseas orders, and production has been reduced since April. The consumer market has been severely affected by the overseas epidemic, with exports of consumer end goods and consumer batteries basically reducing production by 30%-40%, which is expected to continue until the beginning of June.

Upstream raw material prices:

Cobalt: overseas cobalt prices are still flat, domestic cobalt salt plants basically hold a common point of view, the price is mainly supported by the cost of raw materials. Given that the supply of cobalt salts still exceeds demand, SMM expects cobalt salts to still have room to fall, but there is little room for decline. Cobalt tetroxide is subject to the increase in orders for downstream lithium cobalt acid, the demand increases, the four cobalt factory also wants to offer, but the downstream cathode material factory is forced by the battery factory strong financial pressure, four cobalt is still a strong buyer's market, the price of four cobalt is still likely to fall.

Lithium: future demand is not clear, downstream stock willingness is scarce, in addition to a small number of long orders are still being performed, the current market transactions are sporadic. Due to the limited room for price decline, the operating rate of pyroxene lithium extraction enterprises is gradually controlled at a low level, and mica lithium extraction enterprises may continue to expand production to reduce costs. Follow-up electricity carbon price trend needs to pay close attention to overseas salt lake and domestic mica lithium price.

Cathode materials and precursors: the price of lithium carbonate has fallen slightly in the near future, because there is little room for price reduction, lithium iron and lithium manganate enterprises do not consider price reduction for the time being. In the aspect of ternary materials, the reduction in the digital market and the demand in the power market have recovered slowly, the order volume in April is still not high, the battery factory has pressed the price seriously, and the ternary precursor and ternary material factory have been forced to reduce the price. At present, the prices of 5 series products have basically reached the bottom.

Nickel: the price of electrolytic nickel hovers at a high level, and the demand for high nickel cathode materials has rebounded slightly recently, and the price of nickel sulfate remains high. However, in view of the weak overall market demand for ternary materials, the operating rate of nickel sulfate producers remains stable, manufacturers have part of the inventory, SMM expects the price of nickel sulfate to remain stable in the later stage.

News:

1. [78000 charging piles to be built in 24 provinces and cities are expected to drive the consumption of new energy vehicles by 20 billion yuan] on April 14, the State Grid started a new round of charging pile construction, with a planned investment of 2.7 billion yuan and 78000 new charging piles. The projects are distributed in 24 provinces (cities), including Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Hunan and Qinghai. Covers public, dedicated, logistics, sanitation, community and port shore power and other types. Among them, there are 53000 charging piles in residential areas, 18000 public charging piles, 7000 special charging piles and 150 shore power facilities. To make up for the difficulties in charging residential areas, lack of platform connectivity and other industry shortcomings, with scientific and technological innovation and deepening reform as the driving force, create a model, promote social capital co-construction, co-operation and sharing, and achieve high-quality development. According to estimates, it can drive the consumption of new energy vehicles to more than 20 billion yuan.

2. [FAW Red Flag New Energy vehicle Factory was built in Changchun: 200000 vehicles per year] the China FAW Red Flag New Energy vehicle Factory project, with a total investment of 7.8 billion yuan, officially started on the 15th. After the completion of the factory, the main production of red flag brand new energy vehicles, intelligent network vehicles, etc., the annual production capacity of the vehicle will reach 200000.

SMM Battery Materials Research team

Hu Yan 021-51666809

Qin Jingjing 021-51666828

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818