China’s rapid development of 5G technology will boost demand for cobalt

SHANGHAI, Sep 23 (SMM)—With strong support from the government, China’s 5G technology develops rapidly, which means demand for rechargeable batteries increases, and this will boost demand for cobalt.    

China is now in a leading position in 5G technology. Up to now, more than 500,000 5G base stations have been built in the country, and the number is expected to exceed 600,000 by the end of this year, covering cities above prefecture level, and more than 100 million terminals have been connected to the 5G network, according to Han Xia, director of the information and communications administration bureau of the Ministry of Industry and Information Technology (MIIT).

Data from CAICT showed that China’s sales of 5G smart phones stood at 16.17 million units in August, accounting for 60.1% of total mobile phone sales, and 22 new models came onto the market, accounting for 48.9% of total new mobile phone models coming online during the same period. For January-August, a total of 93.68 million 5G smart phones were delivered, and 141 new models came onto the market. Sales are likely to rise to 24 million in September.

China’s demand for lithium ion batteries from the 3C market is likely to stand at 39.6GWh in 2020, SMM estimates, and further rise to 43.9GWh and 49GWh in 2021 and 2022 respectively, as mobile phone output will jump on the backdrop of the development of 5G technology.

China’s lithium cobalt oxide (LCO) supply is likely to jump 13.6% year on year in 2020, as demand from 5G smart phones, tablet computers, high-voltage and high-capacity batteries, e-cigarettes, UAVs, TWS headphones and smart home has improved, and as some foreign 3C and battery orders shifted to the domestic market due to the COVID-19 pandemic overseas.  

SMM expects that China’s demand for cobalt from end-users of lithium ion batteries is likely to stand at 24,000 mt (Co content) in 2020, and 26,000 mt (Co content) in 2021 and 29,000 mt (Co content) in 2022