Why is the price of cobalt soaring? Analysis of the demand for cobalt in the domestic market

Cobalt is an important strategic metal and is an excellent alloy and battery material widely used in battery materials and alloy manufacturing. The recent rise in cobalt prices has touched the nerves of the industry.

Why is the price of cobalt soaring?

According to industry data, on February 22, the reference price of metallic cobalt was 377,000 yuan per ton, and just four months ago, on October 22, 2016, the price of metallic cobalt was around 220,000 yuan per ton. , an increase of more than 70%. Just in February this year, the price of metallic cobalt on February 1 was 295,000 yuan per ton, which has risen by about 25% since this month.

According to various sources, affected by the price increase, the three largest domestic cobalt suppliers, such as Huayou Cobalt, GEM and Jinchuan, all have difficulty in obtaining cobalt products, and some cobalt products are suspended. In the securities market, the shares of listed companies in the cobalt industry all showed a large increase. For example, Huayou Cobalt announced on the evening of the 23rd that the company’s closing price increase in the past three trading days has exceeded 20%.

In 2008-2016, the price of cobalt has been relatively stable, why is there a sudden increase in the near future? In the industry view, the most direct and fundamental cause of the soaring cobalt price is the explosive growth of ternary lithium batteries .

In recent years, ternary batteries have become one of the important applications of cobalt. Although the amount of cobalt in a single battery core is not large, with the introduction of the new national energy subsidy new policy, the ternary battery is favored due to the energy density advantage, and a large number of power battery companies will shift their focus to the production of ternary batteries.

“In 2016, more than 80% of China's cobalt demand came from the battery sector. Especially since the fourth quarter of last year, demand for ternary batteries has exploded. The current new energy passenger cars and special vehicles are turning to ternary batteries, and ternary batteries account for the trend. The increase in the ratio will increase the demand for cobalt for a long time.” Guolian Securities analyst Ma Song told reporters.

Cobalt price may continue to rise

The recent stock price rises in addition to commodity trade speculation, the main reason is that the imbalance of cobalt supply and demand fundamentals brings high prices. To stabilize the cobalt price, expanding production capacity may be the fundamental way. However, the elasticity of cobalt production is not large, and "capacity is not on the top."

"China's cobalt resources are insufficient, not the ability to process." Ma Song bluntly. According to the US Geological Survey's 2014 data, the global proven cobalt resources are 25 million tons and the reserves are 7.2 million tons. The reserves are highly concentrated in the DRC, Australia and Cuba. These three countries account for 70% of the world's total reserves. China's reserves are only 80,000 tons, accounting for 1.1% of global reserves.

Ma Song further said that nearly 90% of China's cobalt imports are from the Congo, but the political situation in the Congo is unstable. This political risk will have a great impact on the supply of cobalt.

“At the same time, cobalt ore is associated with ore, associated with copper. If only the increase in cobalt price is not enough to offset the cost of mining, but with the rise in copper prices, the impulse to develop cobalt also exists. Personally believe that the impact of the Congo’s political situation on cobalt supply The impact is even greater. If the political situation continues to turmoil, the future price increase of cobalt is still unpredictable," he admitted.

Cobalt accounts for 10% of the cost of ternary batteries

Many analysts predict that the demand for cobalt in the domestic battery sector will maintain a compound growth rate of 11.7% in the future. In 2017, cobalt will have a supply and demand gap of more than 2,000 tons for the first time. The gap will gradually expand and the cobalt price will continue to rise. The key to the impact of cobalt price on the ternary battery is the cost of cobalt in the ternary battery.

Ma Song gave the reporter an account. The 1KWh battery requires 2.34 kg of cathode material, and the 2.34 kg cathode material has a cobalt content of 12%-15%, which is 0.32-0.35 kg of cobalt. The current cobalt price is 370 yuan/kg, so the cost of cobalt is 118- 130 yuan, the cost of 1KWh ternary battery is about 1,200 yuan, and the cost of cobalt is about 10%. Before the price increase of cobalt, the cost in the ternary battery accounted for about 6%.

With the decline in subsidies for new energy vehicles, power battery companies are also pushing down their costs while increasing battery energy density. Under the momentum of higher cobalt prices, how should the ternary battery break out, is there a substitute for cobalt with higher cost performance?

"Cobalt has no substitutes at present." In Ma Song's view, "only the amount of cobalt can be reduced. With the upgrade of battery technology, the proportion of nickel-cobalt-manganese in the ternary battery will be reduced. Now the mainstream ternary battery nickel The ratio of cobalt to manganese is 5:2:3. In the future, the proportion of nickel will be gradually increased and the amount of cobalt will be reduced. The ratio will reach 6:2:2 or 8:1:1."

Promote cobalt recycling

In recent years, the state has paid more and more attention to the recycling of new energy power batteries, and the market space for power battery recycling has been continuously expanded.

Recently, the Ministry of Industry and Information Technology, the Ministry of Commerce, and the Ministry of Science and Technology issued the "Guiding Opinions on Accelerating the Development of Renewable Resources Industry", proposing to carry out demonstration work on recycling and utilization of new energy power batteries.

“Recycling cobalt is an important way. The cobalt content in China’s cobalt mine is only 0.02%, and the proven recoverable amount is only 40,000 tons; currently 60%-70% cobalt is used in battery production, and China Cobalt relies heavily on imports. If cobalt can be effectively recovered from decommissioned batteries, it will greatly alleviate the external dependence of China's rare metal resources," said Xu Shengming, a professor at Tsinghua University and vice president of Jiangxi University of Technology, in an interview.

In addition, as an important strategic metal element, cobalt is widely used in industries such as hardness alloys and high-temperature alloys. "With the development of China's aviation industry, especially the manufacture of large aircraft, the demand for cobalt will also have a lot of room for improvement in the next 10-20 years. Therefore, it is an inevitable move to put recycling on the agenda." Xu Shengming believes .

However, in Ma Song's view, the current recycling of cobalt is not economical, and the proportion of recycling is still small. "But as the price of cobalt rises, recycling becomes more and more valuable, and the market will grow."

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