[SMM Analysis] weaker downstream demand from May to June after Cobalt Chloride prices may continue to fall

SMM4, March 29: according to SMM, the operating rate of large consumer battery factories from March to April is relatively high, which may be due to three possible reasons.

1) Huawei nova 7 series officially launched on April 23, pay attention to the sales situation, stock in advance;

2) some small battery factories are seriously affected by the epidemic situation and understarted, and a small number of orders are transferred to the factory;

3) due to the impact of the domestic epidemic in February, some orders were postponed to March production.

Orders from big battery makers fell month-on-month in May from April, but feedback was within a manageable range. At present, from the feedback results of the cathode material factory, the battery factory still maintains the normal procurement plan, so the demand for upstream materials such as lithium cobalt oxide, cobalt oxide and cobalt chloride may be reduced slightly. However, in May, it depends on whether the terminal recovery situation and the plan of the mobile phone factory have changed. The epidemic situation in Europe and the United States has not been alleviated for the time being, and domestic terminal consumer demand is still low. Even if orders are not reduced too much in May, demand will be reduced or gradually obvious in June. In the past, the battery factory purchased the off-season from May to June every year.

In May, the demand of the downstream consumer side was weaker than the previous month, and the cobalt chloride manufacturers were more willing to offer prices. It was difficult to reach a consensus on the prices upstream and downstream before May Day, and the market closed sporadically. Today, some cobalt chloride manufacturers increased their quotations to 5.4-56000 yuan / ton, with a market transaction price of 53000 yuan / ton. According to the feedback of a cathode material factory, its downstream battery customers expect the price of cobalt chloride 50, 000 yuan / ton after the festival to calculate the formula price of lithium cobalt. In the short term, the amount of cobalt chloride in the market is 50, 000 yuan / ton.

Today, SMM Cobalt Chloride quoted 5.3-56000 yuan / ton, the average price of 54500 yuan / ton, the same as the previous day. The market has basically entered the holiday mode, the inquiry order is reduced, wait until after May Day to carry on the transaction. The post-festival market is relatively concerned about the resumption of shipping arrangements in South Africa. If the problem of import of cobalt raw materials is alleviated, some cobalt salt plants may quote or loosen after the festival. According to SMM statistics, cobalt chloride accumulated 260 metal tons in March, cobalt chloride inventory is low, but according to research in May, many manufacturers feedback production line is mainly cobalt chloride, because the current price of cobalt chloride is still higher than cobalt sulfate. In May, we will pay attention to the reduction of cobalt chloride downstream, the increment of cobalt chloride supply, and the price of cobalt chloride may continue to fall slightly.