Hong Kong stock concept tracking | The world's largest cobalt-producing country suspends exports, cobalt prices soar, and it is recommended to pay attention to the profit elasticity of related companies (with concept stocks)

The Democratic Republic of the Congo announced on February 24th that the country has decided to suspend cobalt exports for four months to deal with the global oversupply of cobalt in the market. According to a statement from the country's Strategic Mineral Market Regulatory Control Bureau, the Prime Minister and Minister of Mines of the Democratic Republic of the Congo signed a decree allowing regulatory authorities to take temporary measures, including export bans, to prevent any disruptions to market stability. This measure went into effect on February 22nd. The statement also mentioned that an evaluation will be conducted after three months, and the suspension measures may be adjusted or lifted depending on the situation. The Democratic Republic of the Congo plays a crucial role in global cobalt supply. According to data from the International Cobalt Association, the Democratic Republic of the Congo accounts for over 60% of global cobalt production. As of March 10th, the average price of domestic cobalt (1#) has reached 223,000 RMB/ton, representing a 40.25% increase from the low point on February 24th (excluding weekends). In 2022, the price of cobalt sulfate once reached around 120,000 RMB/ton, but as major cobalt-producing countries increase production capacity, the global cobalt supply has transitioned from being in short supply to abundance, causing prices to decline. Cobalt is an essential raw material in the production of lithium batteries, playing a critical role in enhancing battery energy density and charge-discharge performance in ternary lithium battery positive electrode materials. For example, according to Industrial calculations, for every 60% increase in cobalt prices, the theoretical cost of a single ternary lithium battery in a new energy vehicle will increase by approximately 1,000 RMB. With the decrease in cobalt supply and price increases, industry chain companies are taking proactive measures to address the situation. CMOC Group Limited stated that its TFM and KFM mines (both located in the Democratic Republic of the Congo) are currently operating normally, and its nickel-cobalt wet production project in Indonesia can provide alternative resources. Zhejiang Huayou Cobalt also announced that its Phase II project, with an annual production capacity of 50,000 tons of high-nickel power battery ternary precursor materials in Indonesia, was fully completed on February 28th and will soon enter the production phase to help address the supply gap using nickel-cobalt resources in Indonesia. CNGR Advanced Material has taken steps to mitigate supply chain risks by investing in Ganzhou Teng Yuan Cobalt New Material, stockpiling cobalt metal in advance, and utilizing oxygen-enriched blown process to enhance self-supply ratio. CITIC SEC released a research report stating that the decision of the Democratic Republic of the Congo government to suspend cobalt exports for four months starting on February 24th could impact 76% of global cobalt production in 2024. If strictly enforced in 2025, this policy could affect the export of 70,000 tons of cobalt from the Democratic Republic of the Congo and lead to a short-term shortage in the global cobalt market, causing cobalt prices to stabilize and rebound. Chinese companies investing in nickel-cobalt wet production capacity in Indonesia are expected to benefit significantly from cobalt price increases, and domestic cobalt companies with inventory will also benefit. Shenwan Hongyuan Group released a research report stating that cobalt prices are currently at historically low levels, leaving limited room for further declines. With the Democratic Republic of the Congo being the largest global supplier of cobalt and the export restrictions announced in February 2025, there is a significant potential for the situation of oversupply to be alleviated, and cobalt prices are expected to stabilize and rebound. In light of rising cobalt prices, it is recommended to pay attention to the profit elasticity of companies in the cobalt sector, including CMOC Group Limited, Zhejiang Huayou Cobalt, Nanjing Hanrui Cobalt, Ganzhou Teng Yuan Cobalt New Material, LYGEND RESOURCE, and GEM Co., Ltd. Hong Kong stock related concept stocks: Jinchuan International: Jinchuan International recently released a production and sales announcement for its mining operations in 2024. The announcement revealed that the group produced 63,800 tons of copper (in terms of copper content in electrolytic copper and copper concentrates) in 2024, an increase of about 2.9% from 62,000 tons in 2023. The group produced 855 tons of cobalt (in terms of cobalt content in cobalt hydroxide) in 2024, a decrease of approximately 61.3% from 2,207 tons in 2023. In terms of sales, Jinchuan International sold 62,300 tons of copper in 2024 (calculated based on the copper content of directly shipped ore, electrolytic copper, and copper concentrates), which is a 4.6% increase from the 59,500 tons sold in 2023. CMOC Group Limited: The company recently announced that its KFM copper-cobalt mine in the Democratic Republic of the Congo achieved a new monthly high in cathode copper production in February, with the daily processing capacity of the ball mill consistently stable at over 20,000 tons, significantly improving production efficiency. CHINFMINING: The company announced that it expects a substantial increase in the profit attributable to owners of the company for the year ended December 31, 2024, compared to the same period in 2023, with a profit of approximately $400 million, representing an increase of about 44%. This was mainly due to the impact of the international increase in copper prices. According to the production arrangements and operational needs of various mines and smelters, the company expects a comprehensive copper production of approximately 540,000 tons in 2025, including approximately 140,000 tons of cathode copper (including copper product processing services), and approximately 400,000 tons of blister copper and anode copper (including copper product processing services). The company expects to produce approximately 160,000 tons of copper from its own mines, produce approximately 1 million tons of sulfuric acid, produce approximately 900 tons of cobalt-containing cobalt hydroxide, and produce approximately 10,000 tons of liquid sulfur dioxide.