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"Grandma Cobalt" is still "your grandma."
Jul 17,2020 09:37CST
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The content below was translated by Tencent automatically for reference.

SMM News: now the world's power battery manufacturers, cobalt this metal can be said to be "love and hate." To build a ternary battery is inseparable from cobalt, since it is inseparable from its high and cold price, as well as the shortage and instability of supply.

Whether they are first-tier enterprises such as Ningde era, LG Chemical, Panasonic (Tesla), second-tier enterprises such as Funeng Technology, Yiwei Lithium Energy, Lishen Battery, or some unknown third-tier enterprises, they all have to endure the harsh "power" of "Cobalt Grandma" for a long time.

01. Cobalt-free and cobalt-free

In fact, in order to escape the clutches of "cobalt grandma", many battery companies are planning to launch "cobalt-free", if not so extreme, but at least carry out "cobalt-free reform". NCM811 battery, quaternary battery, cobalt-free battery, all kinds of technical routes and concepts appear on the scene one after another.

In the "pour cobalt" movement, Tesla is undoubtedly the most radical. As early as June 2018, Tesla CEO Elon Musk said bluntly that the cobalt content in Tesla's battery was only 3% at that time, and that it would be "cobalt-free" in the future. KenjiTamura, head of Panasonic's car battery business, Tesla's supplier, also said: "We have significantly reduced the use of cobalt and hope to achieve cobalt-free batteries in the near future, and research and development is under way."

So when will Tesla's cobalt-free battery shine? Industry analysts said that in September this year, Tesla repeatedly postponed the battery day, Musk will be proud of the launch of its long-term "cobalt-free battery", that is, by improving the material structure and manufacturing process, a scheme to achieve low cobalt content in its battery. Earlier in February, it was reported that Tesla would use cobalt-free batteries in Chinese-made models.

In the wave of cobalt-free, of course, there are Chinese enterprises. In May this year, Honeycomb officially launched two cobalt-free battery products. It is reported that the SOP time of its cobalt-free battery is June 2021. In addition, also in May this year, Ningde Times also revealed that its company has a reserve of cobalt battery-related technology. at present, research and development is progressing smoothly and is looking for ways to improve the supply chain.

Tesla, Panasonic, Ningde era, Honeycomb Energy and other giants have "rose up", "pouring cobalt" movement is huge, there is a great potential to start a prairie fire.

02. "traitor" Tesla

However, the road of revolution is never plain sailing, and you have to go through wind and rain to see the rainbow. Even, there will be traitors. The "pouring cobalt" movement is no exception.

However, to everyone's dismay, today's "traitor" is Tesla. This "revolutionary slogan" is the loudest.

Tesla, which had planned to release "cobalt-free batteries" on Battery Day in September, suddenly launched a frenzied cobalt purchase program three months before Battery Day. On June 16 this year, it was reported that Tesla would purchase cobalt ore from Glencore, the world's largest metal miner, for use in its super plant in Shanghai and the plant it is building in Berlin. Under the long-term cooperation agreement between the two sides, Glencore will supply Tesla with 6000 tons of cobalt a year. 6000 tons of cobalt, what concept?

Let's look at a set of data. Tesla alone now accounts for about 4.2 per cent of global cobalt production, which was 140000 tonnes in 2019. As the world's largest cobalt supplier, Glencore produced about 46300 tons of cobalt in 2019, and Tesla buys 6000 tons a year, equivalent to taking 14.29% of its production share.

If, think this is not intuitive enough. So, make it a little more visual. Some people in the industry have analyzed that based on the calculation of 4.5kg cobalt per Model 3, the 6000 tons of cobalt per year will be able to meet the cobalt demand of Tesla's 1.33 million Model 3 vehicles. Total global sales of the Model 3 in 2019 were 300000. In other words, Tesla has been hoarding cobalt use for several years.

At that time, the news boosted the morale of cobalt manufacturers who were plagued by "cobalt-free". The domino effect quickly aroused a reaction in the capital markets. On the same day, the trading volume of cobalt plate in the A-share market soared at noon, Hanrui Cobalt Industry and Huayou Cobalt Industry rose by the limit one after another, while Luoyang Molybdenum Industry and Shengtun Mining rose more than 6%.

Not only is Tesla buying large amounts of cobalt, but BMW has also joined the buying army. In early July, BMW announced that it had signed a long-term sustainable cobalt supply agreement with Moroccan mining companies with a contract value of about 100 million euros. Through the order, BMW will be able to secure 20 per cent of the supply of cobalt for its fifth-generation electric vehicles and the remaining 80 per cent will be purchased from Australia; the contract will run from 2020 to 2025.

03. Still "your grandma"

Behind the buying spree of cobalt by Musk and BMW is the risk of a shortage of cobalt. According to the data, the world's proven cobalt reserves are about 7 million tons in 2019. According to the global mining volume of 140000 tons in 2019, cobalt has only 50 years left, which is dwarfed by the billions or even tens of billions of tons of reserves of nickel, manganese, aluminum and other minerals.

Many people in the industry have expressed concern about the shortage of cobalt. Cai Jianyong, chairman of Ningbo Liqin Resources Technology, said that there will be a certain shortage of global cobalt supply in the future. Not to mention, only four years later, by 2024, the global demand for cobalt will be 208000 tons (of which 86000 tons are for lithium batteries for electric vehicles), while the supply is only 200000 tons, resulting in a shortage of nearly 10, 000 tons.

In addition, the Shanghai Nonferrous net Cobalt industry senior analyst also said that as the main producing area of cobalt resources, the epidemic in Africa is uncertain, so the supply of cobalt raw materials is unstable. Glencore Mutanda copper and cobalt mine shut down, reducing the global supply of cobalt raw materials.

So, on the other hand, it is an exaggeration to say that Tesla is a "traitor". To investigate the reason, Tesla used the "one hand does not have cobalt, the other buys cobalt" two-handed wrestling, perhaps this is Musk's intention. Use cobalt-free to suppress the price of cobalt and let yourself take the initiative in the negotiations.

This is Musk's old urchin wisdom.

There is no doubt that Musk's determination to be cobalt-free is real. However, the reality is that there is no cobalt, less cobalt is not easy. To say the least, even if a "cobalt-free battery" is developed, it will not be possible to complete a large-scale replacement of the current ternary battery in the short term. Industry insiders believe that in the next 5 years, the technical path supplemented by ternary lithium iron phosphate will not change. So, before the "cobalt-free battery" becomes mainstream, the industry can not do without cobalt after all.

The "revolution" has not yet succeeded, and comrades still need to work hard.

In this way, your uncle may no longer be your old uncle, but "Cobalt Grandma" is still "your Grandma".

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