Incident: on November 26, a mutant strain was found in South Africa, with more than 1000 confirmed cases in a single day. Many countries have restricted the entry of relevant personnel from South Africa. The global cobalt industry chain is highly dependent on the supply of cobalt ore in the African Democratic Republic of the Congo (DRC). The reserves of cobalt resources in the DRC account for about 50% of the world, and the output accounts for about 70% of the world (gold) cobalt ore supply is concentrated from Katanga copper cobalt ore belt, and South Africa is the largest transit place in cobalt transportation in Africa. Under the disturbance of the epidemic, if the new variant is not effectively controlled in South Africa, the cobalt ore supply may not be as expected in the future, and the cobalt supply chain may face the risk of interruption again.
Recently, cobalt prices outside China have continued to rise, As of December 8, the quotation of MB standard grade cobalt was 32 (+ 0.1) – 32.9 (+ 0.2) USD / pound. On December 8, the cobalt hydroxide coefficient index (minimum cobalt content 30%, CIF China, based on the low price% coefficient of standard grade electric cobalt) was 88% – 90% (the previous value was 89% – 90%). The average price of electric cobalt in China reached 460000 / ton, and the price has reached a new high in the year. The reasons are as follows: 1. The global cobalt industry chain is highly dependent on Africa and Congo The cobalt resource reserves of the Democratic Republic of the Congo (DRC) account for about 50% of the world, and the output accounts for about 70% of the world (gold) cobalt ore supply is concentrated from Katanga copper cobalt ore belt. Under the disturbance of the epidemic, the cobalt ore supply may be less than expected in the future, resulting in a continuous decline in the import of cobalt raw materials. As of October, the cumulative import of cobalt intermediate products was 66500 metal tons, an increase of 5%, but the import in October was 5200 metal tons, a year-on-year decrease of 44% and a month-on-month decrease of 30%. The disturbance at the supply end is increasing Play. The end of the year is the centralized preparation period for downstream battery plants. The shortage of raw materials may be further amplified, and the cobalt price is expected to continue to reach a new high.
According to wind data, from January to October 2021, China Shipbuilding Industry Group Power Co.Ltd(600482) battery output accumulated 159.8gwh, with a year-on-year increase of 250.0%; The installed capacity totaled 107.5gwh, a year-on-year increase of 168.1%. From the demand side, the global sales of new energy vehicles continued to rise, driving up the demand for cobalt. The demand for power lithium battery increases greatly, and the demand for cobalt increases accordingly. At this stage, the demand for power batteries accounts for about 60% of the demand for cobalt. It is expected that the demand for cobalt by power batteries will account for more than 70% of the total demand in 2023.
Cobalt resource end has become a new target for battery enterprises. In April 2021, China Molybdenum Co.Ltd(603993) signed a strategic cooperation agreement with Contemporary Amperex Technology Co.Limited(300750) indirect holding company Bangpu times to deepen cooperation on project strategic shareholding, product underwriting, expanding cooperation and establishing an all-round strategic partnership for new energy metals, which is valid until April 11, 2031. Bangpu times acquired 25% equity of KFM, a wholly-owned subsidiary of China Molybdenum Co.Ltd(603993) with a total consideration of USD 137.5 million. KFM holdings holds 95% of the equity of kisanfu copper cobalt project in the Democratic Republic of the Congo, and the other 5% of the equity is held by the government of the Democratic Republic of the Congo.
Investment suggestion: the cobalt price fluctuates and rises, the shortage of raw materials may be further amplified, and the cobalt price is expected to continue to reach a new high. It is suggested to pay attention to the overall layout of the upstream of new energy and the leading companies in the industrial chain of deep integration.
Risk tip: the risk that cobalt will be replaced by new technology and the supply will increase significantly.
