Cobalt prices rebounded and rose in September

According to the Commodity Market Analysis System of Business Society, as of September 12th, the cobalt price was 254000 yuan/ton, an increase of 1.44% compared to September 1st, when the cobalt price was 250400 yuan/ton. In August, the production and sales of new energy vehicles increased month on month, and the demand for cobalt in the market slowly rebounded. In September, cobalt prices rebounded and rose.

Rising sales of new energy vehicles

According to data released by the China Association of Automobile Manufacturers, in August, China’s production and sales of new energy vehicles completed 843000 and 846000 units, respectively, with a month on month increase of 4.7% and 8.5%, a year-on-year increase of 22% and 27%, and a market share of 32.8%. According to the analysis of the national passenger car market in August released by the Passenger Car Association, the wholesale sales of new energy passenger cars reached 798000 units in August, a year-on-year increase of 25.6% and a month on month increase of 8.2%. The production, sales, and wholesale volume of new energy vehicles have both rebounded, and the market for new energy vehicles has rebounded. The demand for cobalt in the market is expected to rebound.

Rising sales of power batteries

According to data released by the China Automotive Power Battery Industry Innovation Alliance, in terms of production, the total production of power and energy storage batteries in China was 73.3 GWh in August, an increase of 7.4% month on month and 46.8% year on year. In terms of sales, the total sales of power and energy storage batteries in China in August were 65.0 GWh, an increase of 13.3% month on month. In terms of loading volume, China’s power battery loading volume in August was 34.9GWh, a year-on-year increase of 25.7% and a month on month increase of 8.2%. The production, sales, and installation volume of power batteries have both increased compared to the same period last month. The power battery industry in China continues to develop well, and the demand in the cobalt market is slowly recovering.

Overview and outlook

According to Bai Jiaxin, a data analyst at Business Society, the supply and demand in the cobalt market were weak in August, leading to a significant decline in cobalt prices. But as cobalt prices fall below the 250000 yuan mark, there is limited room for cobalt prices to fall. As the traditional peak season of gold, silver, and ten approaches, the production and sales of new energy vehicles have rebounded, and the demand for cobalt in the market has rebounded. In September, cobalt prices rebounded and rose. Overall, the supply of cobalt in the market is stable, and demand is expected to rebound. With cost support, cobalt prices are expected to fluctuate and consolidate in the future.

Recent price trends of hydrochloric acid

According to the Commodity Analysis System of Business Society, the domestic hydrochloric acid market price has temporarily stabilized this week, with an average market price of 158.00 yuan/ton. Weekend prices increased by 3.05% year-on-year. On September 10th, the hydrochloric acid commodity index was 41.58, unchanged from yesterday, a decrease of 69.85% from the cycle’s highest point of 137.89 points (2021-10-26), and an increase of 131.26% from the lowest point of 17.98 points on September 5th, 2012. (Note: The cycle refers to the period from September 1st, 2011 to the present)

Insufficient upstream support and weakened downstream demand

From the supply side perspective, the domestic hydrochloric acid market prices have temporarily stabilized this week, and manufacturers’ inventory is average.

From the perspective of the upstream and downstream industrial chain of hydrochloric acid, the upstream liquid chlorine market has recently stabilized at a low level, with average cost support. The downstream market price of polyaluminum chloride has stabilized at a low level, with a price of 1700.00 yuan/ton. Weekend prices fell 17.92% year-on-year.

Future Market Forecast

In mid to late September, the market price of hydrochloric acid may fluctuate and rise mainly. The upstream liquid chlorine market has recently shown an upward trend, with increased cost support. The downstream ammonium chloride market has stabilized at a high level, and downstream procurement willingness is good. Analysts from Business Society believe that the recent slight fluctuations and gains in the hydrochloric acid market are the main trend.

1、 Price trend

According to the Commodity Analysis System of Business Society, the price of caustic soda has risen this week. At the beginning of the week, the average market price in Shandong was 795 yuan/ton, and on the weekend, the average market price in Shandong was 815 yuan/ton, with a price increase of 2.52% and a decrease of 22.53% compared to the same period last year. On September 7th, the chlor alkali index was 1124 points, an increase of 4 points compared to yesterday, a decrease of 47.18% from the cycle’s highest point of 2128 points (2021-10-24), and an increase of 57.87% from the lowest point of 712 points on January 5th, 2016. (Note: The cycle refers to the period from December 1st, 2011 to the present)

2、 Market analysis

According to the Commodity Analysis System of Business Society, the overall price of domestic caustic soda has slightly increased this week. The current average market price in Shandong region is around 780-830 yuan/ton. The mainstream factory quotation for 32% liquid alkali in Hebei region is around 820-840 yuan/ton. This week, the overall price of caustic soda has risen, with a slight contraction in supply. In terms of downstream alumina, there has been a recovery compared to the previous period, and procurement has been more active compared to the previous period. The market has a clear intention of boosting prices.

According to the price monitoring of the Business Society, in the 35th week of 2023 (8.28-9.1), there were a total of 5 products that rose or fell in the chlor alkali industry price list, 0 products that fell, and 2 products that rose or fell to 0. The main commodities that have increased include: baking soda (10.13%), light soda ash (7.33%), and flake soda (2.90%); This week’s average rise and fall was 3.24%.

Analysts from Business Society believe that in the near future, the price of caustic soda has risen this week, and the supply side has narrowed. There is still a demand for replenishment of downstream alumina in the near future. Overall, it is expected that caustic soda may strengthen its operating market in the future, depending on downstream market demand.

According to monitoring data from Business Society, as of September 7, 2023, the market price of domestically produced industrial grade propylene glycol was referenced at 8800 yuan/ton. Compared with September 3 (reference price of propylene glycol 8600), the price increased by 200 yuan/ton, an increase of 2.33%.

From the data monitoring chart of Business Society, it can be seen that in the first week of September (9.3-9.7), the domestic propylene glycol market as a whole showed an upward trend. This week, the trading atmosphere on the propylene glycol market was good, with new downstream orders relatively stable. The overall focus of the propylene glycol market remained stable and continued to operate slightly stronger. Some propylene glycol factories have raised the price of propylene glycol by around 200 yuan/ton. As of September 7th, the domestic propylene glycol market price has been considered around 8700-9000 yuan/ton.

Analysis of Future Market Trends

At present, the mentality of propylene glycol field operators is good, and downstream demand is mainly for stable orders. It has been heard that some factories have recently planned parking and maintenance, and it is expected that the overall supply side pressure will be relatively small in the short term. Therefore, the propylene glycol data analyst from Business Society predicts that in the near future, the domestic propylene glycol market will mainly operate in a stable, medium, and strong manner, and the specific trend still needs to pay more attention to changes in supply and demand news.

According to the Commodity Market Analysis System of the Business Society, the price trend of the domestic heavy rare earth market has increased. On September 5th, the rare earth index was 502 points, an increase of 4 points from yesterday, a decrease of 50.15% from the highest point in the cycle of 1007 points (2022-02-24), and an increase of 85.24% from the lowest point of 271 points on September 13, 2015. (Note: The cycle refers to the period from December 1st, 2011 to the present)

The price trend of domestic dysprosium oxide, dysprosium iron alloy, and metal dysprosium has increased. As of the 6th, the price of dysprosium oxide was 2.58 million yuan/ton, an increase of 3.61% compared to the 1st price; The price of dysprosium iron alloy is 2.52 million yuan/ton, an increase of 3.70% compared to the previous day’s price; The price of dysprosium metal was 3.31 million yuan/ton, an increase of 5.08% compared to the previous day’s price; The domestic price of terbium series is mainly increasing, with the domestic price of terbium oxide reaching 8.6 million yuan/ton and the price of metallic terbium reaching 10.6 million yuan/ton.

The heavy rare earth market prices have continued to rise in September. Due to environmental reasons, some rare earth mining enterprises have limited production, and some rare earth manufacturers have voluntarily reduced production, which has led to a decrease in spot inventory in the market. Separation plants and metal factories in Sichuan region will have varying degrees of production reduction and shutdown behavior, resulting in tight supply in the rare earth industry and an upward trend in rare earth prices. Recently, there has been continuous news of customs closures in Myanmar, which has raised market expectations for future rare earth prices and led to an increase in the prices quoted by holders. As the traditional peak season of “nine gold and ten silver” approaches, the demand for new energy vehicles, industrial robots and other terminals is also constantly increasing. The rare earth market orders are rising, and multiple positive factors are combined, leading to an increase in the price trend of heavy rare earth in China.

According to statistics, in July, the production and sales of new energy vehicles completed 805000 and 780000 units respectively, with a month on month increase of 2.8% in production and a month on month decrease of 3.2% in sales, with year-on-year growth of 30.6% and 31.6%, respectively. From January to July, the production and sales of new energy vehicles completed 4.591 million and 4.526 million respectively, with year-on-year growth of 40% and 41.7%, respectively. In 2023, the production and sales of new energy continue to rise, coupled with the opening of the Golden Nine Silver Ten Year Plan, the demand for new energy has increased, and the increase in production and sales of new energy vehicles is beneficial for the domestic rare earth market prices. The price trend of the domestic heavy rare earth market has also increased.

After years of governance, the domestic rare earth industry has gradually formed a supply pattern with large groups as the main body and relatively concentrated raw materials. With the continuous development of the foreign rare earth industry, China’s share of rare earth production has decreased from 90% to 70%. According to statistics, China’s rare earth export volume in July was 5425.6 tons; From January to July, the cumulative total export volume of rare earths from China was 31661.6 tons, a year-on-year increase of 6%. The export volume of rare earth commodities from China increased, which to some extent supported the prices of the rare earth market.

Future Forecast: The current rare earth market is showing a strong demand and tight supply overall pattern. In the short term, the price trend of the heavy rare earth market is rising, and in the medium to long term, there is a lack of primary and renewable supply sources. Dysprosium and terbium oxides will also face shortages. In addition, driven by emerging and traditional demands such as energy-saving motors, industrial machinery, wind power, variable frequency air conditioning, and consumer electronics, the global rare earth permanent magnet market demand is expected to continue to grow, Long term bullish market prices in the rare earth industry.