Demand analysis of cobalt industry in China in 2017

       First, the policy boost, new energy vehicle sales are still hot

1, cobalt downstream applications: three yuan battery to become the master

Power batteries have become the largest segment of cobalt downstream applications. In the application of lithium batteries, mainly used for cobalt cobalt acid lithium battery (LCO), acid lithium nickel cobalt aluminum battery (NCA) and three yuan (NCM) battery cathode materials, the cobalt acid lithium battery is mainly used in the field of consumer electronics, three yuan battery and power battery used in consumer electronic field. At present, cobalt battery is still mainly used in the application of cobalt, but with the development and popularization of new energy vehicles, the three yuan material is expected to become an explosive point of cobalt demand.

Since 2016, the new energy vehicles subsidy policy is more stringent, but that policy back slope system is introduced, the change is helpful to accelerate the marketization and popularization of new energy vehicles standardization, avoid long-term dependence on the plight of the industry into subsidies. At the same time, the state and local policies have landed, but also to ensure the continuity of the promotion of new energy vehicles. Therefore, the new energy vehicle sales will still return to higher growth levels, stimulating demand for cobalt.

At present, the high energy density of three yuan material is the trend of power batteries. Through the study of new model recommended for new energy vehicles in 2017, it is found that the proportion of three yuan material in the battery system is increasing. The $three battery 149 passenger cars, passenger cars accounted for 203 of the total number of paragraph 73.4%; by three yuan in the car battery 307, accounting for 464 of the total number of special vehicle paragraph 66.13%; at the same time, since 2017, the Ministry released the application limit of three yuan in the battery on the bus, and the bus has been published in the national 5 batch of new energy vehicles to promote the application of models directory of 1115, the proportion reached 62.57%. With the further improvement of the stability of the three yuan material, the proportion of the three yuan battery used by the bus is expected to rise rapidly.

Two, fixed production capacity, reverse supply and demand pattern

1, large mines reduced production, hand ore reduced

China is a big country of cobalt smelting, but it has only 1.1% of the world's total cobalt reserves (80 thousand tons). Congo (DRC) reserves for the first in the world, at 47.89%, is also China's major importer of cobalt. Cobalt is mainly divided into four types: copper and cobalt, nickel and cobalt, cobalt and arsenic containing cobalt and cobalt as pyrite and associated metals. In recent years, copper, nickel and other metal prices down, cut or stop production mine incidents, cobalt ore output growth rate decline, or even negative growth. Recently, Congo (DRC) hand mine production also reduces the total supply of cobalt. Hand ore refers to cobalt containing 3-20% sulfide ore, in the past, Congo (gold) about 1.4-1.5 tons of cobalt metal for hand ore, and the supply of hand ore also caused a certain impact on the cobalt market. In 2016, Amnesty International's exposure to human rights issues attracted worldwide attention. Congo (gold) in 2016 also vigorously remediation hand ore problems, resulting in a serious decline in the supply of hand ore, is expected to lead to global cobalt concentrate supply contraction.

2, new capacity is limited

Because of the long-term price of cobalt in the doldrums before 2016Q4, overseas mining giants will not high production. Secondly, as the cobalt ore production, and not to a large extent depends on the price of copper, nickel, and cobalt price rise can not effectively promote mine production unilaterally. 2017-2018 years, large mines put into operation less, so new capacity is limited.