File photo shows a nickel-cooper-cobalt ore sample.
BEIJING, Aug. 5 (Xinhua) -- Cobalt prices in China are expected to have good performance in the second half of the year on rising demand for the metal, the Xinhua-run Shanghai Securities News reported on Wednesday.
The metal prices have continued the uptrend in early August, after its sharp increase last month. Statistics of the ccmn.cn, a nonferrous metal information provider, show that the average price of cobalt metal on Tuesday was 296,000 yuan per ton, an increase of 21.81 percent month on month.
Data of the exbxg.com, a stainless steel e-trading center, shows that its cobalt price index on Tuesday rose to 296 points, up 5.7 percent from the previous trading day. In July, the index rose 17 percent.
After the Spring Festival which fell in late January this year, domestic cobalt prices fell sharply due to multiple factors such as the COVID-19 epidemic. From the beginning of March to the end of June, the cobalt price hit the lowest level of 241,000 yuan per ton, with the largest cumulative drop of 13 percent. In July, the price of cobalt rose by more than 14 percent, and it took only one month to recover the decline of the previous four months.
The increase in cobalt prices reflects essentially the industry participants' expectations on the supply-demand of the metal. From the demand side, they are optimistic about the cobalt demand in the second half of the year from sectors such as new energy vehicle power batteries and 3C (computer, communication and consumer electronics) digital product batteries. On the supply side, the supply of cobalt is mainly concentrated in the Democratic Republic of the Congo and the supply is relatively tight due to regulation and control measures, according to Wu Hui, general manager of research department of China YiWei Institute of Economics, a think tank.
Data shows that the domestic power battery market is gradually recovering. Data released by China's car power battery power industry innovation alliance shows that in June, domestic power battery production totaled 5.3GWh, a year-on-year decrease of 16.2 percent and a month-on-month increase of 3 percent. In terms of installed capacity, the domestic power battery installed capacity was 4.7GWh in June, a year-on-year decrease of 29.1 percent and a month-on-month increase of 34 percent. Despite the year-on-year sharp fall in the installed capacity in June, it has reached the level of July last year, implying the industry decline is expected to be reversed in the second half of the year.
From the perspective of the consumer side of 3C products, a report released by Canalys, a third-party research organization, shows that in the second quarter of 2020, the quarterly growth rate of the smartphone market in China was 25 percent, with shipments exceeding 90 million units. The domestic smartphone market is gradually recovering.
CITIC Securities believes that since July, the pandemic in the Democratic Republic of the Congo and South Africa has further weighed on the cobalt production and transportation. It is expected that the domestic cobalt raw material supplies will continue to be tight in the second half of the year. Driven by the supply gap and the rigid demand for replenishment, cobalt prices are expected to rise sharply. (Edited by Hu Pingchao with Xinhua Silk Road, hupingchao@xinhua.org)
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