Core Viewpoint - The rare metals sector is experiencing mixed performance, with significant movements in key stocks and a notable increase in the rare metals ETF's scale and liquidity, indicating strong investor interest and potential opportunities in the market [1][3][4]. Group 1: Market Performance - As of August 20, 2025, the China Securities Rare Metals Theme Index decreased by 0.02%, with stocks like Dongfang Zirconium and Yunnan Zinc hitting the daily limit up, while others like Tianqi Lithium and Shengxin Lithium fell [1]. - The rare metals ETF (562800) showed a turnover of 4.79% during the trading session, with a total transaction value of 76.08 million yuan [3]. - The rare metals ETF reached a new high in scale at 1.576 billion yuan and a new high in shares at 2.266 billion, ranking first among comparable funds [3]. Group 2: Fund Flows and Returns - The rare metals ETF has seen continuous net inflows over the past three days, with a peak single-day net inflow of 45.66 million yuan, totaling 87.15 million yuan [3]. - Over the past year, the rare metals ETF's net value increased by 72.84%, ranking in the top 10.15% among index equity funds [3]. - The ETF's highest monthly return since inception was 24.02%, with an average monthly return of 8.13% during rising months [3]. Group 3: Supply and Demand Dynamics - The Democratic Republic of Congo's government has implemented a temporary export ban on cobalt products, expected to reduce global cobalt supply by 22.3% in 2025, while demand is projected to grow by 9.1% due to stable penetration rates of ternary lithium batteries [4]. - The supply-demand balance for cobalt is shifting from surplus to shortage, with cobalt prices expected to maintain above 350,000 yuan per ton in 2026-2027 [4]. Group 4: Strategic Importance of Rare Earths - The U.S. Department of Defense's acquisition of a 15% stake in MP Materials for $400 million highlights the strategic value of rare earths, with the U.S. committing to purchase neodymium oxide at prices 74% higher than domestic levels [5]. - China has implemented export controls on heavy rare earth elements, reinforcing the strategic position of rare earths as dual-use resources amid a backdrop of "de-globalization" [5].

Core Viewpoint - The temporary ban on cobalt exports from the Democratic Republic of the Congo (DRC) has been extended for an additional three months, now lasting a total of seven months, in response to an oversupply in the global cobalt market [1][7]. Industry Impact - The extension of the cobalt export ban has led to a rise in the energy metals sector, with companies like Tengyuan Cobalt (301219.SZ) seeing a stock price increase of 15.42%, and other firms such as Hanrui Cobalt (300618.SZ) and Huayou Cobalt (603799.SH) also experiencing significant gains [1]. - Cobalt prices have increased, with the average price of electrolytic cobalt reported at 244,000 yuan/ton, up by 8,500 yuan from the previous working day [1]. Company Responses - Major Chinese cobalt producers, including Luoyang Molybdenum and Huayou Cobalt, have indicated that their operations in the DRC are not significantly impacted by the export ban extension. Luoyang Molybdenum reported a cobalt production of 114,200 tons last year, a 106% increase year-on-year, while Huayou Cobalt noted that its cobalt capacity is primarily based in Indonesia, minimizing the impact of the DRC ban [2][4]. - Analysts suggest that domestic cobalt refining companies may face pressure due to increased uncertainty in cobalt raw material supply, although they currently have sufficient inventory to continue production [2][3]. Market Dynamics - The DRC is the largest cobalt producer globally, accounting for 76% of the world's cobalt production last year [5]. - Prior to the ban, cobalt prices had already dropped nearly 70% from their peak in Q1 2022, indicating a significant oversupply in the market [6]. - The ban's extension is expected to affect 128,000 tons of cobalt exports from the DRC this year, potentially shifting the global cobalt market from oversupply to a shortage by 2025, which could drive prices up [8]. Future Outlook - Industry experts have mixed views on whether the DRC's export ban will effectively alter the global cobalt supply-demand balance. Some predict short-term price increases driven by market sentiment, while others caution that without sufficient demand, the oversupply may persist [8][9]. - The DRC's strategy may include measures to enhance its pricing power in the cobalt market, although the implications of such strategies on the overall market dynamics remain uncertain [9].