Cobalt prices have reached another record high in 1Q18, according to the data from EnergyTrend, a division of TrendForce. As the result, the prices of lithium-ion battery cells are estimated to increase by 5~15% QoQ in 3Q18, but would have a chance to remain flat in the fourth quarter.
According to Duff Lu, senior research manager of EnergyTrend, the overall prices of IT batteries have been growing since 2Q18 due to the rising costs of materials in 1Q18, but the growth was more moderate than expected as some battery makers had stocked up in advance. However, the price growth would be steeper in 3Q18. Particularly, prismatic cells, cylindrical cells, and polymer cells would witness a QoQ price growth of 6~8%, 7~9%, and 10~15% respectively. In addition to rising material costs, the increase of cylindrical cell prices is also due to the undersupply of this cell type as a result of decreasing production capacity of suppliers.
Manufacturers of key battery system components have allocated increasing capacity to automotive components, which has squeezed capacity for capacitance. In addition to capacitance, the impact on production capacity has been expanded to passive components such as resistors and inductor. In 3Q18, resistors are expected to see a QoQ price rise of 5~10%, the highest among all the components. As for capacitance, it would see a small price increase of 3~5%, because automotive components have occupied some of the production capacity that is originally for IT applications.
In terms of battery technology development, some manufacturers have introduced solutions with a higher ratio of nickel or higher voltage to increase the energy density. However, a higher ratio of nickel brings along higher requirements for material structure stability and better conditions for the battery cell manufacturing process. Therefore, suppliers of high-nickel cells are mainly based in Japan. As for high-voltage solutions, they are commonly used in digital products. Chinese battery cell manufacturers have begun to cut into this field.
As for the market of cobalt, it previously experienced a price hike, because the market expected the rapid development of China's new energy vehicles to boost the cobalt demand. However, the demand from China is not expected to influence the global demand-supply situation of cobalt significantly in the near term. This is because the global demand for cobalt is around 110,000 to 120,000 tons per year currently, of which only about 7,000 to 8,000 tons come from new energy vehicles in China. EnergyTrend notes that the issue of illnesses related to cobalt mining in Congo may affect the production capacity of this metal. Meanwhile, the introduction of high-nickel solutions to the market in 3Q18 would also have certain impacts on cobalt demand. The two factors would jointly affect the future price trend of cobalt.