Tianfeng Securities·2025-10-15 03:44Investment Rating - Industry Rating: Outperform the Market (maintained rating) [7] Core Viewpoints - The recent quota policy from the Democratic Republic of the Congo (DRC) has set a total quota of 96,600 tons, with a base quota remaining unchanged at 87,000 tons. Major companies receiving quotas include Luoyang Molybdenum (36% share), Glencore (22% share), and Eurasian Resources (12% share) [2][3] - The quota distribution aligns with expectations, although the local DRC company EGC received a quota despite minimal past exports, likely due to local policy support. The introduction of a 10% royalty fee on cobalt sales will significantly increase local revenue [3][4] Summary by Sections Quota Distribution - The quota distribution is based on historical export volumes from January 1, 2022, to December 31, 2024. The current quota aligns with expectations, with the DRC's local company EGC receiving a quota despite limited past exports [3] - The total quota of 96,600 tons represents a 56% decrease compared to last year's exports of nearly 220,000 tons, indicating a tightening supply-demand balance [4] Market Outlook - The current inventory situation is critical, with an estimated four months of inventory across the supply chain. This could lead to increased supply tension if any segment of the chain holds excess stock [4] - As of October 13, prices for cobalt sulfate, lithium cobalt oxide, and battery-grade cobalt have increased by 40%, 38%, and 29% respectively from September 22 to October 13, indicating strong downstream demand [4] Investment Recommendations - Short-term expectations include continued inventory depletion and potential price increases due to low inventory levels. The long-term logic suggests a direct supply-demand balance or even a shortage, leading to an upward adjustment in cobalt prices [5] - Companies not significantly affected by DRC policies, such as Huayou Cobalt and Likin Resources, as well as Luoyang Molybdenum, which has now clarified its quota status, are recommended for investment [5]