[SMM analysis] Lithium Cobalt oxide order in June has no incremental demand for cobalt chloride and cobalt tetroxide.

SMM5 March 22:

Affected by the epidemic, lithium cobalt acid battery factory procurement are cautious, do not prepare too much inventory. This week, due to the short-term shortage of cobalt raw materials, the prices of cobalt salts and cobalt tetroxide have risen, and the cost of lithium cobalt manufacturers has increased. Downstream lithium cobalt battery factory purchase orders increased, but this week there are few transactions, upstream and downstream are still in the game, some battery factories tender procurement of lithium cobalt oxide has not yielded results. Next week, purchase orders may be landed one after another, and the price of lithium cobalt may rise slightly.

According to feedback from SMM customers, consumer battery procurement is off-season from May to June, and lithium cobalt battery orders in June are basically the same as in May. From the point of view of the domestic market, the demand for lithium cobalt oxide batteries and materials in the tablet computer market increased slightly in May, while the demand for lithium cobalt batteries and materials on mobile phones decreased compared with the previous month. From the perspective of overseas markets, the Japanese and South Korean markets picked up, and export orders for lithium cobalt were flat in June compared with May; the procurement demand for lithium cobalt in the Indian market did not meet expectations. Xiaomi mobile phones were released to the outside world, and the normal operating rate may return to June, but the previous inventory of raw materials was higher and the operating rate was lower than expected, and the procurement demand for lithium cobalt batteries and materials was postponed to July.

To sum up, the market of lithium cobalt battery and materials is relatively light from May to June, and there is no increase in demand for cobalt chloride and cobalt tetroxide. By the end of the month, most lithium cobalt battery factories have signed purchase orders for lithium cobalt in June, resulting in an increase in purchase orders for upstream cobalt tetroxide and cobalt chloride. Recently, due to the shortage of domestic cobalt raw materials in mid-early June, manufacturers of cobalt salt and cobalt tetroxide are in a strong mood to raise their quotations, and the transaction price is also gradually rising. It is expected that cobalt raw materials will arrive in Hong Kong in late June, and if the demand at the power end and consumer side increases slowly in July, the prices of cobalt salts and cobalt tetroxide may fluctuate slightly.

SMM Cobalt Lithium New Energy Research team

Lin Fangwen 021Mui 51666878

Qin Jingjing 021 Murray 51666828

Mei Wang Qin 021 Mui 51666759

Huo Yuan 021 Murray 51666898

Wu Yang 021 51666818