According to the data detection of the business agency, although the cobalt Market in 2019 is not as hot as it was in 2017 and 2018, it is still a big rise and fall. Generally speaking, the price trend of cobalt Market in 2019 shows such a trend, which is mainly determined by two major events in 2019.

1、 Subsidy decline

In 2019, the main vocabulary of new energy vehicle market is subsidy decline. On the afternoon of March 26, the Ministry of finance, the Ministry of industry and information technology, the Ministry of science and technology and the development and Reform Commission jointly issued the notice on further improving the financial subsidy policy for the promotion and application of new energy vehicles (hereinafter referred to as the “notice”). The main contents of the notice include: 1. The maximum subsidy of pure electric passenger vehicles is only 25000 yuan after the decline, which is 50% less than that in 2018. 2. After the transition period, the local subsidy for new energy vehicles will be directly cancelled (except for new energy buses and fuel cell vehicles). 3. No subsidy will be given for electric vehicles with a endurance of less than 250km. The transition period is from March 26 to June 25, 2019. The official release of the notice marks a comma for the speculation on the subsidy policy since 2018, and also marks a pause in the production and sales of new energy vehicles.

After the transition period of subsidy, the production and sales of new energy vehicles in 2019 have fallen for five consecutive months on a year-on-year basis since July. According to the data of China Automobile Association, from July to September this year, the sales volume of new energy vehicles was 80000, 85000 and 80000 respectively, down 4.7%, 15.8% and 34.2% year-on-year respectively; by October and November, the sales volume was 75000 and 72000 respectively, and the year-on-year decline rate even expanded to more than 45%. The sharp decline of new energy vehicle production and sales is bad for the cobalt market. The demand for cobalt in the future market is expected to decline, and the cobalt market is bad.

2、 Glencore cobalt stoppage

Mutanda is a large copper and cobalt mine owned by Glencore in the DRC. In 2018, mutanda produced 190000 tons of copper and 27300 tons of cobalt, respectively accounting for 0.9% and 20.8% of the global supply, making it the largest cobalt mine in the world. In the first half of 2019, mutanda produced 13400 tons of cobalt, up + 13.6% year on year. In August 2019, Glencore announced that it would close the cobalt mine at the end of 2019 and enter a two-year maintenance period due to the rapid drop in the price of battery metal materials and the increase in project cost. On November 26, Glencore announced that the mutanda copper and cobalt mine had entered the maintenance period ahead of time, so that the shutdown of Glencore copper and cobalt mine was officially realized. Glencore’s production of cobalt ore stopped, and the supply of cobalt in the aftermarket dropped significantly, and the market of cobalt in the aftermarket was good.

3、 Summary and future forecast

The sharp decline in subsidies for new energy vehicles has led to the slowdown in the development of new energy vehicles, the bearish rise in demand for cobalt in the future market, and the accumulation of water in the early cobalt price, all of which are the reasons for the sharp drop in the price of cobalt in 2019. But the decline of subsidies for new energy vehicles is absolutely the most important and key fuse among many reasons. Glencore’s discontinuation of cobalt production is a shot in the arm of the cobalt market. The rebound in cobalt prices since August was stimulated by this news. However, with the passage of time, the decline rate of new energy vehicle sales is far faster than the market expectation. The demand of cobalt market is not optimistic, and the rebound of cobalt price begins to decline. At the same time, due to the increase of cobalt cost, the decline rate of cobalt price is relatively small, and the cobalt price remains at a relatively high level until the shutdown of Glencore cobalt mine is realized. After Glencore stopped production, the price of cobalt rose for a time, but due to the close of the year, cobalt enterprises in order to ease the financial pressure, low-cost shipments occurred, which made it difficult for cobalt prices to rebound substantially. When the time comes to 2020, the production and sales of new energy vehicles will gradually stabilize, 5g mobile phones may usher in a wave of replacement, and the demand for cobalt in the future market is expected to increase; in terms of supply, Glencore cobalt production will be stopped and realized, the supply of cobalt will be reduced, and the supply-demand relationship of cobalt will be changed to some extent. 2020 is expected to be a year of stable development of cobalt, and the price of cobalt is expected to rise. At the same time, the investment is cautious and With the decrease of market liquidity, it is difficult for the cobalt market to reproduce the soaring market in the past 17 years. Overall, the market of cobalt in 2020 is expected to rise steadily.