![]() First, the poor market demand due to the severe COVID-19 pandemic in the first half of 2020 resulted in a rapid year-on-year growth in 2021. The demand from the power battery market grew noticeably in 2021. On the demand side, global demand for cobalt is expected to be 194,000 mt in metal content, an increase of 27% year on year. The global cobalt supply is expected to stand at 177,000 mt in metal content, a year-on-year increase of 7.5%. On the supply side, the increase in the cobalt capacity was relatively small in 2021. The global cobalt market saw supply deficit in 2021, and the prices of refined cobalt surged sharply. The global shortage of cobalt resources due to the impact of transportation and logistics has become the main bottleneck of the cobalt supply. Global output and sales of NEVs are expected to reach 6.6 million units in 2021, a year-on-year increase of around 108%. From 2020 to 2021, the countries around the globe, especially European countries, raised their subsidies for NEVs. The prices of cobalt has entered the upward cycle since H2 2020 until now, driven by the global demand for NEVs, as well as the shortage of global cobalt supply and the disrupted logistics. The low operating rates at downstream cobalt salt plants led to price cuts. The unexpected outbreak of the COVID-19 pandemic caused the downstream plants to delay the productions in H1 2020, further weakening the cobalt demand. ![]() Domestic smelters mainly purchased raw materials under small orders or from domestic inventories. Downstream demand weakened quickly in 2019 as China's NEV subsidies declined sharply. This, combined with the COVID-19 pandemic which delayed cobalt demand, kept most market participants on the sidelines. The prices of cobalt dipped somewhat.Ĭhina's NEVs subsidies were lowered in H1 2019-2020, which has undermined the market's confidence in the increase in cobalt demand. Most domestic smelters chose not to concede to tough overseas miners in terms of pricing and stood on the sidelines. The cobalt supply surplus estimate was heightened in 2018 by the increasing supply from new cobalt capacities driven by rising prices as well as the reduced shipments of NEVs due to the investigations on subsidy fraud. The prices of cobalt continued to soar in 2017 as the uncertainties haunting the supply side attracted a large amount of investments and prompted resources development. The demand of NEVs quickly boosted the demand for cobalt in 2016 on the back of intensive NEV subsidies, and the prices of cobalt rose rapidly. The prices of cobalt rose sharply from 2016 to 2018 due to the boom in downstream demand and the lack of cobalt resources. Eventually, the fluctuations in the supply and demand cause price volatility, forming a fluctuation cycle. That in turn impacts the overall supply of the industry. And the prices affect the profits and the expectations of profits, thereby affecting the release of the new capacity of enterprises in the future. ![]() The supply and demand determine the prices. SHANGHAI, Feb 10 (SMM) - The cobalt industry features obvious cyclicity. ![]()
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