Core view
1. Since the second half of 2019, cobalt prices have continued to strengthen. In terms of cobalt raw materials, as of March 18, 2022, LME cobalt closed at US $82000 / ton, an increase of 55.9% over the same period last year and 192.9% over the low level in 2019. In terms of cobalt salt, China’s cobalt sulfate reported 120 yuan / kg, an increase of 30.4% over the same period last year and 233.3% over the low level in 2019. In terms of cobalt oxide, China’s Co3O4 reported 442.5 yuan / kg, an increase of 30.4% over the same period last year and 233.3% over the low level in 2019. The import price of cobalt ore rose sharply and the production cost of cobalt increased. China’s cobalt ore production is small and needs a large amount of import to meet China’s demand. According to the data of Baichuan Yingfu, China’s Cobalt import reached 18890 tons in 2021, eight times the output of that year. As the import price of cobalt ore continued to rise, the production cost of cobalt products in China increased significantly. According to the data of Baichuan Yingfu, as of March 18, 2022, the production cost of cobalt trioxide was 428000 yuan / ton and the production cost of cobalt sulfate was 591000 yuan / ton, an increase of 146.6% over the same period last year. The downstream industry is booming and the demand continues to increase.
The downstream demand for cobalt is mainly ternary batteries and 3C batteries of new energy vehicles. According to the data of Baichuan Yingfu, they account for 43% and 41% of the total demand respectively in 2021. According to wind data, in 2021, China’s mobile phone shipments reached 350 million, a year-on-year increase of 13.9%, and the sales of notebook computers reached 195000, a year-on-year increase of 4.8%. In addition, the output of new energy vehicles reached 3.677 million in 2021, a year-on-year increase of 152.5%. Under the massive demand supported by cost, the valuation is expected to continue to grow. With the continuous growth of raw material import prices, cobalt prices are supported by costs, and the prices may remain high. In addition, with the rapid development of downstream 3C and new energy vehicle industry, the demand for cobalt continues to increase, and the price of cobalt is expected to rise further in the future.
\u3000\u30002. In the past week, the prices of most major non-ferrous metals fell, including aluminum up 3.0% and tin down 2.8%. In terms of aluminum, as of March 18, 2022, SHFE aluminum price reported 22575 yuan / ton, up 3.0% week on week. The main reason for the rise of China’s aluminum price is that the downstream construction accelerated last week and the aluminum ingots continued to go to the warehouse; In terms of tin, as of March 18, 2022, the price of SHFE tin was reported at 339000 yuan / ton, down 2.8% week on week. China’s zinc price fell mainly due to the low start-up of downstream solder enterprises and weak demand for tin.
\u3000\u30003. The Fed’s decision to raise interest rates was announced, and the gold price fluctuated upward. In the early morning of March 17, Beijing time, the Federal Reserve announced its interest rate resolution for March, announcing a 25 basis point increase in interest rates, and the target interest rate range of federal funds rose to 0.25-0.50%. With the landing of the interest rate hike boots, the expectation of interest rate hike in the international gold market was released quickly. The gold price briefly fell to US $1895.7/oz, and then rebounded rapidly, reaching a maximum of US $1934.8/oz two hours after the interest rate hike. As of March 18, 2022, Comex gold futures closed at US $1935.6/oz.
\u3000\u30004. Market review. In the past week, one of CITIC’s non-ferrous metal sub sectors rose and eight fell. Among them, the lithium sector rose 1.0%; The top three sectors were tungsten, lead zinc and gold, with declines of 5.3%, 5.2% and 5.0% respectively. In terms of individual stocks, the top three weekly gains were Earth-Panda Advanced Magnetic Material Co.Ltd(688077) , Youngy Co.Ltd(002192) , Poco Holding Co.Ltd(300811) , with weekly gains of 12.8%, 12.4% and 9.6% respectively; 35.
Investment advice
The cobalt price continues to run at a high level, and relevant production enterprises in the cobalt industry may benefit, such as Zhejiang Huayou Cobalt Co.Ltd(603799) , China Molybdenum Co.Ltd(603993) , Cngr Advanced Material Co.Ltd(300919) , etc.
Risk tips
The geographical conflict intensifies, the production and sales of new energy vehicles are less than expected, and the production and sales of 3C products are less than expected.
