China's cobalt market picks up

The domestic cobalt market bottomed out in the month and rebounded, and the cobalt price fluctuated slightly. As of May 17, the cobalt price was 353000.00 yuan/ton, an increase of 2.32% from the early month (May 1) cobalt price of 345000.00 yuan/ton, and an increase of 3.32% from the May 7 cobalt price of 341666.66 yuan/ton. Cobalt prices bottomed out and rebounded and the market picked up.

China's domestic mobile phone market

According to data released by the China Academy of Information and Communications Technology, from January to April 2021, the overall domestic mobile phone market shipments reached 125 million units, a year-on-year increase of 38.4%. The domestic mobile phone market has risen sharply, but compared with the sharp increases of 92.8%, 240.9%, and 65.9% in the previous three months, the overall domestic mobile phone shipments in April turned to a year-on-year decline of up to 34.1%. Despite bid farewell to shipment growth, the proportion of 5G mobile phone shipments still steadily increased, setting a new high in April, reaching 77.9%. Domestic smartphone shipments have increased in the first quarter of 2021. The country is in a period of strict control of the epidemic in the first quarter of 2020. In April 2020, there will be a retaliatory rebound in mobile phone consumption. The decline in smartphones in April 2021 is more a reflection of the slowdown in consumer demand. In the future, the sales of mobile phones will slow down, the demand in the cobalt market will decline, and the upward momentum of the cobalt market will weaken.

Global mobile phone sales pick up

According to the statistics agency Strategy Analytics’ global mobile phone shipment report for the first quarter of 2021, global smartphone shipments were 340 million units in the first quarter of 2021, an increase of 24% year-on-year, setting a new high since 2015. According to data released by Digitimes Research, global smartphone shipments will be 1.24 billion in 2020, a decrease of 8.8% compared to 2019. The sharp increase in sales in the first quarter of 2021 is mainly due to the healthy demand momentum and the vigorous promotion of Chinese manufacturers in 5G. However, the mobile phone market in the future is affected by the epidemic in India, and in the first quarter of 2020, the sales volume of the mobile phone market affected by the epidemic has fallen sharply.

Quotes Summary

Mobile phone sales rose sharply in the first quarter, and domestic cobalt market demand rose, stimulating domestic cobalt prices to rise. However, the growth momentum of the mobile phone market in the future is insufficient. It is expected that the demand in the cobalt market will decline in the future, and the upward momentum of the cobalt market will remain insufficient. Cobalt prices are expected to fluctuate slightly in the future.

Related listed companies: Huayou Cobalt (603799), Hanrui Cobalt (300618), Luoyang Molybdenum (603993).

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