Domineering! Chinese enterprises hold the "lifeline" of electric vehicles to help China lead the global supply chain

The US "Wall Street Journal" published an article entitled "China Leads the Global Battery Supply Chain Competition" on February 12, saying that miners used bicycles to carry a bag of cobalt ore and came along a dusty road to a simple condition. Market. Here, they line up to sell these ore to wholesalers.

According to the article, most of these wholesalers are Chinese, who then sell the raw materials to Chinese companies, which ship the cobalt-filled packages to China and process them into rechargeable lithium-ion batteries. Lithium-ion batteries are widely used in notebook computers, smart phones, and electric vehicles.

The article said that the world is now vying for a competition for the cobalt supply chain, so far China is far ahead. As the production of electric vehicles increases, the global demand for cobalt may rise further.

Metal cobalt

The Congo is the world's largest cobalt-producing country, and China is the largest consumer of Congo cobalt. According to data from Darton CommodiTIes, about 94% of the cobalt produced in this West African country is exported to Chinese smelters.

Trang Meyer, chief executive of Toronto-based exploration firm First Cobalt Corp., said the company began to realize that the Congo’s significance for electric vehicles is equivalent to Saudi Arabia’s significance for internal combustion engines. He said that Chinese companies are keenly aware of the importance of the Congo to electric vehicles, from cobalt mining to battery production, and China is trying to control the entire ecosystem.

The staff wore rivets on the lithium ion battery chip on the assembly line.

The article said that China has already become the world's largest electric vehicle market. In 2011, China ranked the electric vehicle industry as one of the seven strategic emerging industries. The development of the domestic battery industry has become an important part of the government's support plan.

The article believes that Chinese companies are currently dominant in the first step of lithium-ion battery production. According to data from the commodity research firm CRU Group, the refined cobalt chemicals produced by these companies account for about 77% of the market, compared with 67% in 2012. CRU consultant Hepel said that Chinese companies may soon occupy more than 90% of the market.

According to the article, about 54% of the world's cobalt supply comes from the Congo, while Chinese companies dominate the middlemen network. These intermediaries acquired cobalt from the hands of many free miners in markets such as Kolwezi.

a copper-cobalt mine in the Congo

According to the article, almost no demand for bulk commodities has risen faster than cobalt. Cobalt is a by-product of copper and nickel ore. According to the US Geological Survey, global cobalt production has tripled since 2000 to 123,000 tons per year.

Demand growth is even faster, according to data from research firm Wood-McKenz, which is expected to reach more than 200,000 tons by 2025. Electric vehicles are an important cause of the surge in demand for cobalt. Morgan Stanley estimates that the use of cobalt in electric vehicles in 2014 was about 1,300 tons. This figure is expected to increase to 113,000 tons this year and 63,000 tons in 2025.

These expectations have led to a doubling of cobalt prices in the London trading market over the past year. Thomson Reuters data shows that cobalt prices have risen more than 230% since the end of 2015.

Profile picture: Cobalt price index

Jack, an analyst at London-based market intelligence firm Roskil, who tracks cobalt, said the cobalt market would face some serious problems if the company’s forecast for electric vehicles is accurate. Tight supply will give China another advantage because of its strong position in the cobalt supply chain.

According to data from Darton CommodiTIes, the China National Materials Reserve Bureau's cobalt reserves are about 5,000 tons, about 15 days of global supply.

According to Coleet 27 Capital Corp. Chief Executive Milevsky, it is clear that the Chinese market wants to be a core force in electric vehicles.

According to the article, the global battery capacity is about 110 GWh per year, mainly for consumer electronics, electric vehicles and power storage. In the past year, China has announced plans to increase its production capacity by more than 150 GWh in the next three to four years, which is three times the current capacity. This dwarfs Tesla's “super factory” in the Nevada desert, which plans to add 35 GWh capacity by 2020.

Sivaram, a researcher in the field of science and technology of the American Foreign Relations Association, said that China controls most of the world's solar panels, wind turbines and batteries.