CMOC(SH:603993) HTSC·2025-08-20 02:34Investment Rating - The report maintains an "Overweight" rating for the cobalt industry, indicating a positive outlook for investment opportunities in this sector [7]. Core Viewpoints - The cobalt market is expected to enter an upward price cycle from 2025 to 2027, driven by supply constraints from the Democratic Republic of the Congo (DRC) and increasing demand from the lithium battery sector [11][12]. - The DRC government has implemented temporary export bans and may introduce export quotas, which could significantly reduce cobalt supply and lead to a supply-demand imbalance [11][30]. - The report forecasts that cobalt prices could stabilize at over 350,000 RMB per ton during the 2026-2027 period due to these supply constraints and robust demand growth [5][12]. Supply Summary - The DRC, which accounts for over 75% of global cobalt supply, has announced a temporary export ban that is expected to reduce its cobalt output by approximately 34% in 2025, resulting in a global supply decrease of 22.3% [2][33]. - If the DRC implements export quotas, global cobalt supply is projected to be 266,000 tons and 289,000 tons in 2026 and 2027, respectively, reflecting year-on-year growth of 10.1% and 8.7% [33][34]. - The DRC's supply reduction policies are anticipated to lead to a significant improvement in the supply-demand balance, with a projected shortage of 0.7 million tons in 2025 [4][60]. Demand Summary - Global cobalt demand is expected to grow significantly, with projections of 248,000 tons, 283,000 tons, and 329,000 tons for 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 9.1%, 14.0%, and 16.3% [55][56]. - The demand for cobalt is primarily driven by the lithium battery sector, particularly the ternary lithium batteries, which are expected to see a recovery in penetration rates in the domestic market [3][38]. - The consumer electronics sector is also anticipated to recover, contributing to stable demand for cobalt [47]. Balance Summary - The report indicates that the supply-demand relationship for cobalt is expected to improve significantly, with a shift from an oversupply of 83,000 tons in 2024 to a shortage of 7,000 tons in 2025 [4][60]. - Long-term projections suggest that the cobalt market will remain in a tight balance, with shortages of 17,000 tons and 41,000 tons in 2026 and 2027, respectively [4][60]. Price Outlook - Short-term cobalt prices are expected to remain strong, with a likelihood of maintaining high levels until the end of 2025 due to ongoing supply constraints [5][65]. - The long-term price center for cobalt is projected to exceed 350,000 RMB per ton, driven by supply-side policies and sustained demand growth from the battery sector [5][12].