Core Viewpoint - The cobalt market is entering a supply-driven price uptrend due to the ongoing export ban from the Democratic Republic of Congo (DRC) and limited incremental supply from Indonesia's MHP [1][4]. Supply - Cobalt reserves are primarily concentrated in the DRC, with major producers including Luoyang Molybdenum and Glencore. The DRC's export ban, first announced in February 2025 and extended in June, aims to manage inventory and support previously low cobalt prices [2]. - Indonesia's MHP production capacity is expected to ramp up significantly, with an estimated cobalt output of 28,000 tons in 2024, accounting for 9.7% of global production. However, this increase may not sufficiently offset the supply reduction from the DRC [2]. Demand - Global cobalt consumption is projected to reach 222,000 tons in 2024, with electric vehicles (43%) and consumer electronics (30%) being the primary demand drivers. Domestic cobalt consumption is estimated at 123,000 tons, with consumer electronics also representing about 43% [3]. - The demand for cobalt in electric vehicle batteries is expected to remain strong, despite some market share pressure from lithium iron phosphate batteries. The shift in NCM materials towards higher nickel content is anticipated to boost cobalt demand [3]. - In the consumer electronics sector, the demand for lithium cobalt oxide, a key component in lithium-ion batteries, is expected to rise due to advancements in AI technology and increased consumer demand for higher battery capacities [3]. Price Outlook - Following the DRC's export ban, China's imports of cobalt intermediate products saw a significant decline of 61.6% in June, indicating a real supply shortage. This trend is expected to continue, with imports remaining low and MHP production not compensating for the reduction [4]. - As of July 25, domestic electrolytic cobalt inventory was reported at 13,111 tons, a 300% year-on-year increase. However, the reduction in imports is likely to accelerate inventory depletion [4].

Group 1 - The Democratic Republic of Congo (DRC) has announced a four-month suspension of cobalt exports due to concerns over global market oversupply, which has been extended for an additional three months [1][2] - The suspension is expected to significantly alter the global cobalt supply-demand landscape by 2025, potentially leading to an upward shift in cobalt prices [1][5] - China's imports of cobalt from the DRC have seen a substantial decline, with June imports dropping by 60.8% compared to May, indicating tightening supply [2][3] Group 2 - Companies like Luoyang Molybdenum Co. have stated that the export ban will have limited impact on their operations in the short term, as they have sufficient inventory to manage through the supply disruption [3][5] - The ban is expected to lead to a depletion of existing inventories, which may result in a tighter supply situation for cobalt in the coming months, particularly in August and September [5][6] - Cobalt prices have already shown a significant increase following the DRC's export ban, rising from 166,000 CNY/ton to 250,000 CNY/ton within approximately 20 days, reflecting a 50.6% increase [6]

Group 1 - The "anti-involution" policy is intensifying and is expected to become a sustained investment theme, requiring nationwide unified market construction and optimization of performance assessment mechanisms for high-quality capacity export by Chinese enterprises [1] - Currently, the implementation of related policies is not yet comprehensive, and the market remains in a phase of trading expectations, with low-cycle manufacturing varieties likely to become the main trading focus [1] - A quantitative indicator system has been developed to score and rank cyclical manufacturing sectors based on their "involution" degree and potential for reversal, highlighting industries with high "involution" and significant reversal potential as worthy of attention [1] Group 2 - The cobalt price is expected to rise due to a significant decrease in imports, with June's wet-process cobalt intermediate product imports dropping by 61.63% month-on-month and 43.14% year-on-year, leading to a cumulative import decline of 11.10% [2] - The extension of the export ban from the Democratic Republic of Congo is anticipated to further reduce inventory levels, with expectations of continued declines in July and a potential drop in smelting enterprise inventories by August and September [2] - The market is expected to transition to a state of low raw material inventory, which may significantly support prices, presenting investment opportunities in the rising cobalt market [2] Group 3 - The soft drink industry is projected to maintain cost advantages through 2025, with leading companies expected to have relatively controllable profit fluctuations [3] - New trends in the industry indicate stronger growth potential in segments such as sugar-free tea, health water, sparkling water, carbonated tea, and energy drinks, leading to recommendations for strong soft drink leaders [3]

Export Ban Extension - The Congolese Strategic Mineral Market Regulatory Authority (ARECOMS) has extended the temporary export ban on cobalt for an additional three months due to high inventory levels in the market [1][2] - The ban affects all cobalt exports from the Democratic Republic of the Congo (DRC), including industrial, semi-industrial, small-scale, and artisanal cobalt [2] Cobalt Market Dynamics - Cobalt is a critical component in lithium-ion batteries, enhancing energy density and stability [1] - The DRC holds the largest cobalt reserves globally, with 6 million tons, accounting for 55% of the total land reserves [1] - Global cobalt production is projected to reach approximately 291,300 metric tons in 2024, a year-on-year increase of 22.39%, with the DRC contributing 220,000 tons, representing 75.86% of the total [1] Price Fluctuations - Following the initial export ban in February, cobalt prices rebounded nearly 60%, with the price of cobalt hydroxide doubling [2] - Prior to the ban, cobalt prices had fallen below $10 per pound, marking a significant decline due to a shift in supply-demand dynamics [2] Impact on Chinese Companies - Chinese companies, such as Daosheng Technology and Tengyuan Cobalt, reported no immediate impact from the export ban, citing sufficient raw material reserves [3] - Major cobalt producers in China, including Luoyang Molybdenum and Huayou Cobalt, have shown strong revenue growth, with Luoyang Molybdenum reporting revenue of 46.006 billion yuan and a net profit increase of 90.47% year-on-year [3] Inventory and Supply Chain - The extension of the export ban is expected to create a supply gap, accelerating the consumption of existing inventories and potentially driving cobalt prices higher [3][4] - Despite the ban, domestic cobalt salt production and inventory levels remain high, with limited effects on inventory depletion observed so far [4] Long-term Outlook - Analysts maintain an optimistic view on cobalt prices, predicting that domestic cobalt prices may exceed 250,000 yuan per ton [5] - The DRC may implement export quotas in the long term to enhance its pricing power in the cobalt market [5] Emerging Demand - The demand for cobalt is expected to grow due to advancements in new technologies and the continued development of electric vehicles and consumer electronics [6] - Global cobalt consumption is projected to reach approximately 200,200 metric tons in 2024, reflecting a year-on-year increase of 7.15%, with China's consumption expected to rise by 5.6% [6]

Core Viewpoint - The extension of the cobalt export ban by the Democratic Republic of Congo (DRC) is expected to impact cobalt prices positively, as it aims to address the oversupply in the market and may lead to a supply shortage, thus increasing prices [1][2][4]. Cobalt Market Dynamics - Cobalt is a critical metal for energy transition, widely used in battery manufacturing and alloys, with DRC being the main global supplier [2]. - Prior to the export ban, cobalt prices had dropped significantly, with a reported price of $11.26 per pound in 2024, down 25.48% year-on-year [2]. - Following the initial export ban in February, cobalt prices peaked at 250,000 yuan/ton but later fell to 230,000 yuan/ton due to high historical inventory levels and unclear future policies [2]. Price Movements - After the announcement of the extended export ban, cobalt prices showed a notable increase, with "Longjiang 1 cobalt" rising by 22,000 yuan/ton, reaching a price range of 244,000 to 268,000 yuan/ton [3]. Impact on Companies - Companies primarily dealing with cobalt, such as Zhejiang Huayou Cobalt Co., Ltd., Nanjing Hanrui Cobalt Co., Ltd., and Ganzhou Tengyuan Cobalt Industry New Materials Co., Ltd., saw their stock prices rise significantly following the ban announcement [4]. - The DRC's export ban is expected to exacerbate raw material shortages in major consuming countries like China, with potential supply reductions exceeding 100,000 metal tons [4][5]. Company Responses - Companies like Luoyang Molybdenum Co., Ltd. reported a significant increase in cobalt production and sales for 2024, with production up 105.61% to 114,200 tons and sales up 266.23% to 108,900 tons [6]. - Luoyang Molybdenum operates two major mines in DRC, benefiting directly from the price rebound due to the export ban [7]. - Tengyuan Cobalt Industry indicated that they have sufficient safety stock to mitigate the impact of the export ban on their operations, and they maintain good relationships with suppliers to ensure raw material availability [8].

Industry Overview - The Congolese Strategic Mineral Market Regulatory Authority (ARECOMS) announced on June 21 that it will extend the cobalt export ban for three months due to sufficient cobalt inventory in the market [1][23] - The decision will apply to all sources of cobalt ore in the Democratic Republic of the Congo (DRC) [23] Price Movement - Since the cobalt export ban was implemented in February, cobalt prices have rebounded significantly from historical lows [2][6] - As of June 20, prices for MB cobalt, cobalt intermediates, and domestic metal cobalt were reported at $15 per pound, $11.2 per pound, and 224,000 yuan per ton, reflecting increases of 58%, 91%, and 47% respectively since February 24 [2][7] - The extension of the export ban is expected to further reduce domestic cobalt inventory and potentially lead to a second round of price increases [2][23] Supply Dynamics - The DRC is the world's largest cobalt resource country, with 2024 reserves accounting for 55% and production for 76% of global totals [2][8] - The DRC's export ban has significantly impacted global supply, and the country is expected to maintain its dominant position in the cobalt market [8] - Despite high growth in Indonesian nickel-cobalt production, it is insufficient to offset the supply contraction caused by the DRC's export ban [13] Demand Factors - The main consumer of cobalt is the power battery sector, which accounted for 47% of global cobalt demand in 2024 [26] - However, downstream demand remains weak, with production rates for key materials showing mixed results [26] Strategic Intent - The DRC's export ban aims to boost cobalt prices and prevent low-cost outflows of strategic resources, while also enhancing the country's international influence [3][32] - The government is likely to continue seeking measures to control cobalt exports to secure long-term strategic benefits [32][33]

Core Viewpoint - The Congolese government has extended the temporary ban on cobalt exports for an additional three months due to high market inventory levels, impacting all forms of cobalt mining activities within the country [1] Supply Dynamics - The Democratic Republic of Congo (DRC) dominates the global cobalt supply chain, holding 55% of the world's cobalt reserves, estimated at 6 million tons in 2024, and accounting for 76.4% of the global annual production of 22,000 tons [3] - China, as the largest consumer of cobalt, heavily relies on the DRC, importing 62,000 tons of cobalt intermediate products in 2024, with 62,000 tons coming from the DRC, representing nearly the entire share [3] - The extension of the export ban will directly affect raw material supply from June to December, posing a significant risk of raw material shortages for domestic cobalt refining enterprises in China [3] Price Trends - Cobalt prices have experienced significant fluctuations, dropping from a high of 570,000 yuan per ton in March 2022 to a historical low of 160,000 yuan per ton in February this year [4] - Following the first export ban, electrolytic cobalt prices rebounded to 250,000 yuan per ton but have since stabilized around 230,000 yuan per ton [4] - The current extension of the ban is expected to impact approximately 128,000 tons of cobalt exports from the DRC over a seven-month period, which is over 40% of the global annual cobalt production for 2024, potentially shifting the market from oversupply to shortage [4] - On June 23, the price of cobalt surged by 22,000 yuan in a single day, reaching 256,000 yuan per ton, marking the largest single-day increase in nearly a decade, with other cobalt products also seeing price increases [4]

Summary of Cobalt Market Conference Call Industry Overview - The cobalt market is experiencing a significant shift from tight balance to substantial shortage due to export restrictions from the Democratic Republic of Congo (DRC) [1][2] - DRC accounts for 76% to 80% of global cobalt supply, with companies like Luoyang Molybdenum Co. controlling 50% to 60% of DRC's cobalt exports [2][3] Key Points and Arguments - **Export Restrictions**: DRC's government has implemented strict export quotas since February, which are expected to continue, significantly impacting global cobalt prices [2][9] - **Supply Shortage**: The cobalt supply is projected to decrease by 50,000 to 60,000 tons year-on-year by 2025, transitioning the market from surplus to shortage [1][7] - **Price Projections**: Cobalt prices are expected to rise from 230,000 to 300,000 CNY per ton, with potential peaks between 300,000 to 350,000 CNY in the second half of the year [1][8][9] - **Demand Growth**: Cobalt demand is anticipated to grow at around 5% annually, driven primarily by the battery sector, which constitutes 60% to 70% of total demand [4][5] Additional Important Insights - **Impact of Inventory**: High inventory levels have temporarily stabilized cobalt prices, but as inventory decreases, demand from downstream companies is expected to drive prices higher [7][8] - **Role of Indonesia**: Indonesia's contribution to cobalt supply is limited and cannot compensate for the shortfall from DRC, with only about 27,000 to 28,000 tons imported last year [3][10] - **Investment Opportunities**: Companies such as Huayou Cobalt, Liyang Molybdenum, and others are highlighted as having strong investment potential due to their favorable positions in the market [5][10][12] Future Market Outlook - The overall cobalt market is expected to maintain high price levels due to government policies and supply constraints, with significant investment opportunities in the sector [11][12]

中信证券研报指出，刚果（金）政府于6月21日宣布将 钴出口临时禁令再延长三个月，这将导致6-12月 份中国难以从刚果（金）进口钴湿法冶炼中间品。我们测算此举或影响刚果（金）2025年12.8万吨的钴 出口量，或将使得2025年全球钴行业由供应过剩转为短缺7.8万吨，推动钴价开启第二波涨势。 ...