Summary of Conference Call on Cobalt Market Dynamics Industry Overview - The cobalt market is experiencing significant changes due to delays in the export of cobalt raw materials from the Democratic Republic of Congo (DRC), leading to a reduction in China's cobalt inventory and a subsequent rise in cobalt prices since December [1][2][3]. Key Points and Arguments - Cobalt Price Surge: The price of electrolytic cobalt in Wuxi has reached 436,000 yuan, marking a new high for the year. This increase aligns with previous expectations discussed in early December [2]. - Supply Chain Disruptions: The DRC's cobalt export process is still under approval, causing delays that are expected to extend into January. This has resulted in a significant reduction in China's cobalt inventory, which is projected to drop to approximately 8,000 tons by the end of April 2024, enough for only half a month's usage [3][4]. - Future Price Predictions: It is anticipated that cobalt prices could reach an average of 500,000 to 600,000 yuan per ton in 2026, driven by potential supply shortages and increased demand as companies prepare for possible disruptions [1][6]. - Beneficiary Companies: Companies with Indonesian MHP production capacity, such as Huayou Cobalt, Greeenmei, and Tengyuan Cobalt, are expected to benefit significantly from rising cobalt prices. Huayou Cobalt's MHP capacity of 230,000 to 240,000 tons will notably enhance its profit elasticity [1][5]. - Nickel Market Dynamics: Nickel prices have rebounded due to news from the Indonesian nickel mining sector, but the long-term trend remains uncertain. Strict enforcement of nickel mining quotas by the Indonesian government could shift the market from surplus to a balanced state, benefiting companies like Huayou Cobalt and Greenmei [1][7]. - Lithium Market Outlook: The lithium market remains stable, although some lithium iron phosphate companies plan to reduce production temporarily. Overall demand for lithium is expected to depend on battery production schedules. Huayou Cobalt's lithium business is projected to be profitable, especially with the expansion of the Arcadia project [3][7]. Additional Important Insights - Market Sentiment: The current market sentiment indicates a potential "short squeeze" scenario for cobalt prices in 2026, as companies may prefer to engage in arbitrage rather than production due to cost imbalances [6]. - Investment Recommendations: Investors are advised to focus on companies with robust production reserves, such as Huayou Cobalt, Luxshare Precision, and Greenmei, as they are well-positioned to capitalize on the upcoming market trends [7][8].