Congo (DRC), The World's Largest Producer Of Cobalt, Raised Its Price Forecast For Cobalt In Domestic Turmoil

- Dec 13, 2017 -

According to Xinhua News Agency, the Congolese security department said on December 8 that the Ugandan rebel forces entrenched in the eastern part of the country launched an attack on UN peacekeepers in the morning in North Kivu province, killing more than 10 peacekeepers. Another 40 people were injured.

As the country is the world's largest cobalt producer, this has raised concerns about the market supply. Some agencies believe there is a possibility that cobalt prices will rise further in the short term.


Agency raised cobalt price expectations

According to LME's quotations, the three-month cobalt contract was quoted at $ 75,000 a tonne on the 8th. The price of cobalt has risen by as much as 24% in a month.

BMO Capital Markets predicts that cobalt prices could rise sharply over the next two years due to the growing demand for electric vehicle batteries and does not rule out the possibility of doubling cobalt prices by 2019 at current levels.

The company expects global cobalt ore supply to fall 2.7% this year. Among them, the country's cobalt production is expected to be reduced by 5,000 tons as Congolese national mining company faces a lawsuit by the International Tribunal.

Citigroup forecast the average cobalt price in 2018 to be $ 75,000 per tonne and $ 80,000 per tonne in 2019 and 2020.

As of December 8, the Yangtze River non-ferrous metal cobalt offer at 515,000 to 530,000 yuan per ton, the average price of 52.25 million. The December 7 cobalt commodities index rose significantly to 183.03, up 2.81 points from the previous day, setting a new all-time high since September 1, 2011, reaching a record low of 69.84 points reached on July 5, 2016. %.

Cobalt producers highlight the value of resources

Industrial Securities Research reported that highlighting the value of resources will be the basis for the continued rise in cobalt prices. At the same time, cobalt as a small metal varieties, its market size is small, price elasticity.

Non-ferrous metals industry analysts believe that only from the downstream new energy vehicles, 3C product demand growth judgments, cobalt prices have strong upward momentum.

At the same time, according to Baichuan Information, the recent price of electrolytic cobalt increased by 10.68% from the previous month. Southwest Securities Research reported that this year, cobalt powder, electrolytic cobalt, cobalt concentrate prices are 80% to 100% growth rate. Benefit from the price of cobalt products, cold sharp cobalt gross profit margin steady rise.

The report also revealed that limited supply of Congolese cobalt ore by 2018 will mainly focus on the production of the Huayou Cobalt Project and the re-production of the Jianeng project, which is expected to increase by less than 10,000 tons.

The report pointed out that Hanrui Cobalt deep plowing Congo gold for many years, familiar with the local procurement of cobalt raw materials channels and modes of cobalt prices in the rally, the strengthening of the Congolese local tenement owners and independent mining contractor mining team cooperation in order to stabilize and expand Source of mineral sources, to ensure cost advantage of raw material supply.

According to the semi-annual report of Shengting Mining, the company further expanded its overseas mineral trading business. The project of comprehensive utilization of 3,500 tons of cobalt and 10,000 tons of copper in the DRC has also entered the implementation phase.

【A share impact】

China Merchants Securities: domestic cobalt prices rose sharply, inventory is low. Cobalt prices in foreign countries continued to rise. However, due to the fact that there is not a large amount of stockpile of ready-made cobalt metal in the Chinese market next year, market inventories are at a low level. As a result, the price of cobalt in the domestic market has risen sharply and prices are expected to rise further due to the current low inventories . According to the results of the survey conducted by China Merchants Securities, the DRC shows that most of the newly-invested smelting plants under construction are currently under construction. Next year, cobalt shortages will be transmitted to the shortage of cobalt ore, with a focus on resource-based enterprises. Continue to recommend: Luoyang Molybdenum, Huayou Cobalt, Hanrui Cobalt.

CITIC Securities: the surge in demand for raw materials for battery making the world's leading auto parts resources to participate in the lock, especially cobalt, cobalt metal both domestic and foreign prices are accelerating upward, the price of cobalt from the previous 430,000 / t finishing platform to restart the rally, has now exceeded 510,000 / Ton, the future is expected to further impact the 600,000 / ton high, to maintain the industry "stronger than the market" rating. It is estimated that the performance of leading enterprises in the sector in the fourth quarter will continue to exceed expectations. It is recommended to focus on the profitability of cobalt companies. Hurray Cobalt, Luoyang Molybdenum, Hanrui Cobalt, Greenmead, Jubilee Technology are highly recommended and the "Buy" rating.

Source: China Battery Network

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