Macro Research - The core inflation and overall CPI have been diverging since the beginning of the year, driven by anti-involution governance, fiscal support, and rising gold prices, which are beneficial for the long-term recovery of core inflation [2][5] - In October, the CPI increased by 0.2% year-on-year and month-on-month, while the PPI decreased by 2.1% year-on-year but rebounded to 0.1% month-on-month, indicating a steady recovery in inflation [3][16] Overseas Strategy Research - The recent strengthening of the US dollar is primarily due to the US government shutdown causing liquidity issues, hawkish statements from the Federal Reserve, and weakness in non-US currencies [6][25] - Historically, a strong dollar has led to capital outflows from Hong Kong stocks, and under the currency peg system, it may temporarily affect local liquidity and sectors in Hong Kong [7][26] - Short-term focus should be on the reopening of the US government and economic data, while mid-term prospects for Hong Kong stocks are optimistic, particularly in the technology sector [8][27] Transportation Industry Research - The Chinese aviation sector is expected to enter a "super cycle" as supply and demand gradually recover, with a significant increase in profitability anticipated [9][10] - The supply side is constrained by airspace bottlenecks, leading to a low growth environment, while demand is expected to remain robust due to the ongoing aviation population dividend [11][10] - The recovery in demand will drive ticket prices higher, contributing to a sustainable increase in profitability for airlines [10][11]

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the cobalt industry, specifically focusing on the recent cobalt export quota policy implemented by the Democratic Republic of the Congo (DRC) [1][3][8]. Core Insights and Arguments - **Cobalt Export Quota**: The DRC has established a cobalt export quota system, with a remaining quota of 18,100 tons for 2025 and a total quota of 96,600 tons for 2026 and 2027, which represents only 44% of the DRC's estimated cobalt production for 2024 [1][3]. - **Impact on Global Supply**: The quota is expected to significantly reduce global cobalt supply by over 40%, which will likely support an increase in cobalt prices [3][11]. - **Price Increases**: Since February 24, cobalt intermediate prices have surged by 185%, with overseas MB cobalt metal and domestic metal cobalt prices increasing by 107% and 123%, respectively [1][6]. - **Market Dynamics**: The market is expected to be dominated by a few platforms, including Glencore, the DRC government, and Eurasian Resources, which may lead to increased price volatility and elasticity [1][7]. - **Strategic Intent**: The DRC aims to enhance its international bargaining power and ensure long-term high cobalt prices through quantity control measures [8]. Additional Important Content - **Recent Import Trends**: In August, China's imports of wet-process intermediate products from the DRC fell by 91% year-on-year and 64% month-on-month, marking the third consecutive month of significant decline [2][13]. - **Domestic Production and Demand**: Domestic metal cobalt production in China decreased by 36% year-on-year in August, while the production of cobalt sulfate and cobalt oxide increased by 6% and 38%, respectively [14]. - **Company Focus**: Companies to watch include Huayou Cobalt and Liqin Resources, which have wet-process nickel-cobalt refining capacity in Indonesia, and DRC-based companies like Luoyang Molybdenum and Shengton Mining that have received quotas [15][16]. - **Future Price Expectations**: The market anticipates that cobalt prices will stabilize around 400,000 yuan per ton, which is crucial for long-term valuation models and profit forecasts for companies in the industry [12][11]. Conclusion - The DRC's new cobalt export quota policy is poised to reshape the global cobalt supply landscape, leading to significant price increases and altering market dynamics. Companies with strategic positions in this evolving market are likely to benefit from the anticipated price elasticity and reduced supply.

Industry Overview - On October 11, the Strategic Mineral Market Regulatory Bureau of the Democratic Republic of the Congo (ARECOMS) announced details of cobalt export quotas, effective from October 16, 2023, calculated based on mining companies' export situations until the end of 2024 [1]. Commentary - The export quotas are primarily allocated to mining companies and the Congolese government platform, with no quotas for smelters. For the remainder of this year, the cobalt export quota is set at 18,100 tons; for 2026/27, the total export is 96,600 tons, of which 87,000 tons are basic quotas and 9,600 tons are strategic quotas from ARECOMS. Major companies like Luoyang Molybdenum, Glencore, and Eurasian Resources have received significant quotas, accounting for 62% of the total [2]. - The tightening supply is expected to drive up cobalt prices, with a strategic re-evaluation of cobalt's value occurring at this time. The total export quota for 2026/27 represents only 44% of the DRC's cobalt production in 2024, with the basic quota accounting for just 40%. The demand for cobalt is anticipated to increase due to the advantages of ternary batteries in high-end, long-lasting markets and the advancement of solid-state battery technology [2]. - The DRC's export ban aims to boost cobalt prices and prevent the low-cost outflow of strategic resources while enhancing international influence through resource control [2]. Supply Dynamics - A significant reduction in supply is expected to lead to larger price increases for raw materials. The DRC's cobalt production is projected to account for 76% of global supply in 2024, with a reduction of over 50% impacting global availability. As of October 11, cobalt intermediate products, MB cobalt, and metal cobalt prices have increased by 185%, 107%, and 123% respectively since February 24 [3]. - The pricing of cobalt products may be dominated by platforms that control spot cobalt raw materials, with a few platforms holding pricing power, potentially increasing price volatility. Glencore, the DRC government platform, and Eurasian Resources hold quotas of 20%, 17%, and 11% respectively [3]. Company Quotas - The following companies have been allocated export quotas for October to December 2025, with their respective basic quota shares and estimated quotas for 2026: - Luoyang Molybdenum: 1,300 tons in October, 2,600 tons in November, 2,600 tons in December, with a 35.9% share [5]. - Glencore: 785 tons in October, 1,570 tons in November, 1,570 tons in December, with a 21.7% share [5]. - Eurasian Resources: 425 tons in October, 850 tons in November, 850 tons in December, with an 11.7% share [5]. - The total quotas for all listed companies sum up to 18,125 tons for Q4 2025, with an estimated total of 87,000 tons for 2026 [6].

Investment Rating - The report maintains a positive outlook on copper, aluminum, and precious metals, indicating a high level of market activity and potential for growth in these sectors [13][16]. Core Insights - Copper prices have surged due to unexpected production cuts, leading to significant supply shortages and rapid price increases [13]. - Aluminum is showing signs of recovery with inventory levels decreasing and downstream processing rates improving, suggesting a potential for sustained high profitability [15]. - Precious metals, particularly gold, are expected to rise further due to market anticipation of continuous interest rate cuts [16]. Summary by Sections Copper - This week, LME copper price increased by 2.09% to $10,205.00 per ton, while Shanghai copper rose by 3.20% to 82,500 yuan per ton [14]. - Supply side: The import copper concentrate processing fee index rose to -$40.36 per ton; national copper inventory decreased by 4,400 tons to 140,100 tons [14]. - Consumption side: Brass rod enterprises' operating rate was 48.49%, showing a slight increase of 0.71 percentage points [14]. Aluminum - This week, LME aluminum price decreased by 1.01% to $2,649.00 per ton, and Shanghai aluminum fell by 0.24% to 20,700 yuan per ton [15]. - Supply side: Electrolytic aluminum ingot inventory in major consumption areas dropped by 21,000 tons to 617,000 tons [15]. - Demand side: Downstream processing enterprises' operating rate increased by 0.8 percentage points to 63.0%, driven by pre-holiday stocking [15]. Precious Metals - This week, COMEX gold price rose by 0.23% to $3,789.80 per ounce, with SPDR gold holdings increasing by 5.15 tons to 1,005.72 tons [16]. - The market is experiencing fluctuations due to U.S. tariffs and escalating geopolitical risks, contributing to a volatile trading environment [16]. Rare Earths - The price of praseodymium and neodymium oxide decreased, while the export volume of magnetic materials saw significant growth [32]. - Domestic rare earth separation enterprises are preparing for production halts, indicating potential supply constraints [32]. Antimony - Antimony ingot price is at 174,900 yuan per ton, showing a decrease of 2.26% [33]. - The demand for antimony is expected to recover as the photovoltaic glass market stabilizes [33]. Molybdenum - Molybdenum concentrate price is 4,450 yuan per ton, with a slight decrease of 0.45% [34]. - The demand for molybdenum is expected to rise as major steel mills resume procurement [34]. Tin - Tin ingot price increased by 1.74% to 273,700 yuan per ton, with inventory decreasing by 6.14% [35]. - The supply-demand dynamics are favorable, supported by strong inventory levels and demand from the semiconductor sector [35].

Group 1 - The cobalt export ban in the Democratic Republic of Congo has led to significant impacts on the global cobalt market, with major producers suspending quotes and some halting production due to raw material shortages [1] - If the cobalt export ban is extended, a substantial increase in cobalt prices is expected in the short term [1] - Companies like Luoyang Molybdenum and Hanrui Cobalt are adopting strategies to manage market changes, focusing on resource release and controlling order intake [1] Group 2 - XINWANDA's wholly-owned subsidiary, Qianhai Hongsheng, plans to establish a private equity fund in collaboration with several investment institutions, with a total subscription amount of 30 million yuan, focusing on commercial energy storage projects in China [2] - This investment reflects the company's strategic positioning in the new energy sector and is expected to provide new growth opportunities and investment returns [2] Group 3 - Fengshan Group's collaboration with Tsinghua University on a technology development contract is primarily for research purposes, with significant uncertainty regarding the commercialization of results [3] - The contract does not impact the company's main business, and the current revenue from its sodium-ion and lithium-ion battery electrolyte products is limited due to intense market competition [3] - The company is cautiously expanding into the new energy sector while maintaining focus on its traditional business, with limited contributions from the new energy segment [3]

Group 1 - The cobalt export ban from the Democratic Republic of Congo has led to significant impacts on the global cobalt market, with major producers suspending quotes and some halting production due to raw material shortages [1] - If the cobalt export ban is extended, a substantial increase in cobalt prices is expected in the short term [1] - Companies like Luoyang Molybdenum and Hanrui Cobalt are adopting strategies to manage market changes, focusing on resource release and controlling order intake [1] Group 2 - Xiwanda's wholly-owned subsidiary, Qianhai Hongsheng, plans to establish a private equity fund in collaboration with several investment institutions, with a total subscription amount of 30 million yuan, focusing on commercial energy storage projects in China [2] - This investment reflects the company's strategic positioning in the new energy sector, potentially providing new growth opportunities and investment returns [2] Group 3 - Fengshan Group has signed a technology development contract with Tsinghua University, but the development is highly uncertain and unlikely to significantly impact the company's main business or 2025 performance [3] - The company is currently focused on traditional business areas while cautiously exploring the new energy sector, facing intense competition in the market [3]

Core Viewpoint - Cobalt raw material prices are on the rise, with smelters purchasing only as needed due to high prices of cobalt intermediates, leading some companies to switch to cobalt salts, which are currently in tight supply [1] Group 1: Market Dynamics - The Congolese government has extended the export ban on cobalt for three months starting from June 22, significantly impacting the market supply [1] - In July, China imported 13,800 tons of cobalt wet-process intermediate products, with expectations of a continued decline in subsequent months, further reducing smelters' raw material inventories [1] - The impending expiration of the three-month extension of the Congolese ban may lead to policy adjustments, including potential extensions or export quotas, reinforcing supply issues [1] Group 2: Demand and Pricing Outlook - The demand remains relatively strong during the consumption peak season, while supply tightness is expected to keep prices robust [1]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View The short - term lithium carbonate market may maintain low - level fluctuations. The supply side remains rigid under the dominance of the spodumene route, and the resumption of production expectations suppresses the medium - term bullish sentiment. The demand side is supported by pre - holiday stockpiling and rising cell costs, but the peak in retail penetration restricts the upward space. The inventory depletion rhythm may be the key variable. If the weekly inventory reduction continues until the end of September, it may drive the futures price to test the 74,000 yuan/ton resistance level, but the breakthrough momentum is limited [3]. 3. Summary by Directory 3.1 Daily Market Summary - **Market Data Changes**: On September 15, the price of the lithium carbonate main contract slightly declined to 71,160 yuan/ton, a decrease of about 2.4%. The basis weakened to 1,140 yuan/ton. The main contract's open interest decreased from 351,000 lots to 309,000 lots, a decrease of 12%, and the trading volume shrank from 592,000 lots to 411,000 lots [1]. - **Supply - Demand and Inventory**: The domestic lithium carbonate capacity utilization rate remained stable at 66.41%. The resumption of production at CATL's Jianxiawo lithium mine has limited impact before November. The supply mainly depends on the spodumene route, and the proportion of the lepidolite route has dropped to 15%. The demand growth rate has slowed down marginally. The retail volume of new energy vehicles decreased by 3% year - on - year in the first two weeks of September, although the wholesale volume increased by 5%. The lithium carbonate social inventory decreased from 140,000 tons to 139,000 tons, a decrease of 1.1% [2]. - **Market Conclusion**: The short - term lithium carbonate market may maintain low - level fluctuations. The inventory depletion rhythm may be the key variable. If the weekly inventory reduction continues until the end of September, it may drive the futures price to test the 74,000 yuan/ton resistance level, but the breakthrough power is limited [3]. 3.2 Industrial Chain Price Monitoring - **Price Changes**: The price of the lithium carbonate main contract increased by 2.14% from September 12 to September 15. The basis decreased by 150.88%. The open interest of the main contract increased by 0.01%, and the trading volume increased by 17.47%. The price of battery - grade lithium carbonate decreased by 0.28%. The prices of some downstream products such as ternary materials and some types of cells increased [5]. 3.3 Industrial Dynamics and Interpretation - **Spot Market**: On September 15, the SMM battery - grade lithium carbonate index price decreased by 18 yuan/ton. The market trading weakened. The proportion of lithium carbonate produced from spodumene has exceeded 60%, while that from lepidolite has dropped to 15%. The market in September shows a situation of simultaneous growth in supply and demand, with demand growing faster, and there may be a temporary supply shortage [6]. - **Downstream Consumption**: From September 1 - 7, the national retail volume of new energy passenger vehicles decreased by 3% year - on - year, and the wholesale volume increased by 5% year - on - year [7]. - **Industry News**: The price of cobalt intermediates continued to rise. Due to the Congo (Kinshasa) policy, there may be a shortage of cobalt intermediate raw materials in China in the future. On September 10, there were reports of the resumption of production at CATL's Jianxiawo lithium mine, but the resumption time is uncertain [9][10].

Summary of Conference Call on Cobalt Sector Industry Overview - The cobalt sector is currently experiencing a price increase trend, supported by Glencore's backing of the Democratic Republic of Congo's (DRC) quota system to enhance cobalt prices, with a significant policy announcement expected on September 22, 2025 [1][2] - Cobalt intermediate prices have seen a slight increase since June 22, 2025, from $13 per pound to $13.7 per pound, but the price rise is limited due to high industry inventory levels [3] Key Points and Arguments - Glencore has ceased external sales of cobalt intermediates to control supply and drive prices up, indicating a potential favorable policy outcome for prices [2] - The DRC's extended export ban could prolong transportation cycles, potentially leading to a supply chain disruption if exports do not resume by late October or November 2025 [6] - Current domestic inventory levels are precarious, with an estimated 40,000 to 50,000 tons remaining by the end of 2025, concentrated in a few major companies [5][6] - The cobalt price trend for 2025 is optimistic, with companies like Huayou, Tengyuan, and Hanrui expected to perform well, particularly after the policy announcement [10] Company Performance - Huayou and Tengyuan are highlighted as reliable investments due to their strong earnings potential, with Huayou benefiting from its Indonesian MHP project [10][13] - Luoyang Molybdenum (Luomoly) is viewed as less favorable for cobalt investments compared to Huayou, Tengyuan, and Hanrui, as its price increase has been limited [11] - Rio Tinto Resources, listed in Hong Kong, achieved a profit of 1.4 billion yuan in the first half of 2025 despite low nickel prices, with an expected annual profit of 3 billion yuan, making it an attractive investment due to its low valuation [12] Additional Insights - The lack of significant price increases in cobalt is attributed to the absence of public news stimuli, despite expectations of an extended export ban [9] - The market is advised to closely monitor Glencore's sales policies as they will significantly influence price movements [7][8] - The overall recommendation is to invest in Huayou, Tengyuan, and Hanrui, while also considering Rio Tinto Resources for its low valuation and potential growth [13]

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core View of the Report - The short - term lithium carbonate futures may continue the volatile and weak pattern, with market focus on the开工 dynamics of lithium mines and salt plants in Jiangxi. The futures rebound space is limited by the rapid convergence of the basis. Potential variables include whether CATL's suspension triggers other salt plants to passively support prices and the marginal support of nickel - cobalt salt price increases on ternary material costs [4] Group 3: Summary by Relevant Catalogs 1. Daily Market Summary - **Lithium Carbonate Futures Market Data Changes** - On September 4, the main lithium carbonate contract closed at 73,420 yuan/ton, up 2.14% from the previous trading day. The basis narrowed significantly from 3,620 yuan/ton on September 3 to 1,280 yuan/ton. The main contract's open interest increased to 353,600 lots, and trading volume soared to 712,200 lots, indicating increased market activity [2] 2. Industrial Chain Supply - Demand and Inventory Changes - **Supply Side** - The proportion of lithium carbonate output from the spodumene smelting end has exceeded 60%, while that of lepidolite has dropped to 15%. Although the lithium carbonate capacity utilization rate remained stable at 66.41% in September, the suspension of CATL's Yichun mining area may intensify local supply disturbances, and the resumption rhythm of salt plants needs attention [3] - **Demand Side** - The downstream shows the characteristic of "weak peak season". In August, the retail penetration rate of new - energy passenger vehicles reached 55.3%, but the cost pressure of power batteries was transmitted to the mid - and upstream. The transaction price of lithium iron phosphate battery cells fell to 0.324 yuan/Wh, and the price of ternary materials also declined continuously. The demand for electrolyte and anode materials was boosted by the "Golden September and Silver October" stocking, but over - capacity restricted the price increase space [3] - **Inventory and Warehouse Receipts** - The total lithium carbonate inventory decreased to 141,100 tons, but the absolute value was still at a high level, and the de - stocking speed was slow [3] 3. Market Price Monitoring - On September 4, the main lithium carbonate contract closed at 73,420 yuan/ton, up 2.14% from the previous day. The basis narrowed from 3,620 yuan/ton on September 3 to 1,280 yuan/ton. The battery - grade lithium carbonate market price was 74,700 yuan/ton, down 1.06% from the previous day. The price of power - type ternary materials decreased by 0.08% to 118,700 yuan/ton, and the price of power - type lithium iron phosphate decreased by 0.63% to 33,995 yuan/ton. The lithium carbonate capacity utilization rate remained at 66.41%, and the inventory decreased by 0.29% to 141,136 tons [6] 4. Industrial Dynamics and Interpretation - **Spot Market Quotes** - On September 4, the SMM battery - grade lithium carbonate index price was 74,869 yuan/ton, down 886 yuan/ton from the previous working day. The battery - grade lithium carbonate was priced at 73,400 - 76,600 yuan/ton, with an average price of 75,000 yuan/ton, down 900 yuan/ton. The industrial - grade lithium carbonate was priced at 72,000 - 73,400 yuan/ton, with an average price of 72,700 yuan/ton, down 900 yuan/ton. In September, the market shows a situation of both supply and demand increasing, with demand growing faster, and there will be a stage of tight supply [7] - **Downstream Consumption** - According to preliminary statistics from the Passenger Car Association on September 3, from August 1 - 31, the retail sales of new - energy passenger vehicles in the national market were 1.079 million, a year - on - year increase of 5% and a month - on - month increase of 9%. The retail penetration rate of the new - energy market was 55.3%, and the cumulative retail sales this year were 7.535 million, a year - on - year increase of 25%. The wholesale of new - energy passenger vehicles by national manufacturers was 1.292 million, a year - on - year increase of 23% and a month - on - month increase of 9%. The wholesale penetration rate of new - energy manufacturers was 53.6%, and the cumulative wholesale this year was 8.926 million, a year - on - year increase of 33% [8] - **Industry News** - From August 21 - 28, the spot price of cobalt intermediates continued to rise. Affected by the Congo (Kinshasa) extension policy, China's cobalt intermediates will face raw material shortages in the future, and prices have upward momentum. Since August 10, CATL's Yichun mining area in Jiangxi has been shut down, and the "butterfly effect" has spread throughout the industry chain [9][10][11]