[SMM Analysis] in May, Lithium Cobalt oxide and 3C Market orders decreased one after another. Cobalt oxide manufacturers cut production one after another.

SMM, 24 April:

The impact of the new crown epidemic continues and the impact on the 3C consumer electronics market continues. According to SMM research, different from the "accumulative pool" situation of ternary material enterprises, the main large-scale cobalt oxide in China has varying degrees of production reduction plans in May, and the scale of production reduction of each enterprise ranges from 20 to 50%.

Since the first quarter, major mobile phone manufacturers such as Apple, Samsung and Huawei have lowered their expectations for mobile phone shipments this year. India and Africa have also suffered a sharp drop in demand for mobile phones such as OPPO, Xiaomi and Vivo as a result of the epidemic. In the first quarter of 2020, domestic 3C market demand fell by about 20% compared with the same period last year, of which mobile phone shipments fell by about 36.4%.

Orders in the lithium cobalt market fell slightly, and demand for cobalt oxide was immediately hit. According to a large 3C battery manufacturer in China, the company's production plan in April was relatively stable compared with March, but market orders fell in May, and the company's production scheduling plan is expected to follow suit. SMM expects domestic lithium cobalt manufacturers to drop their production plans by about 30 per cent in May compared with the previous month.

In addition to the reduction of orders, the gradual consumption of raw material inventory in domestic smelting enterprises is also one of the reasons for the reduction of production. The South African government announced on Thursday (April 23) that it would relax the local national blockade, but the port is still full of goods to be shipped, and given the transport cycle, it is conservatively estimated that the domestic market will not receive new raw materials until mid-June. Although some terminal enterprises have stocks of cobalt raw materials, but the current cobalt price is low, it is expected that cobalt oxide manufacturers and downstream terminals are difficult to reach a more consensus on processing fees and product prices. Therefore, "production reduction of raw materials" has become the choice of enterprises.

On April 24, SMM Cobalt oxide quoted 17-175000 yuan / ton, the same as the previous day. This week, the downstream lithium cobalt acid plant has begun to purchase raw materials one after another. In view of the large decline in 3C market orders, cobalt oxide prices are expected to come under pressure in May.

SMM cobalt lithium new energy research team

Hu Yan 021-51666809

Qin Jingjing 021-51666828

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818