Cobalt Trade Risk Coping Strategy Based on the Perspective of Industrial Chain

Abstract

Based on the principle of maximum entropy, this paper analyses the cobalt resource allocation between different countries after the occurrence of Sino-Australian supply risks with relatively tense international relations, and it proposes corresponding trade redistribution strategies for China and Australia as links in the cobalt industry chain. The results show that for the midstream cobalt trade, Australia will increase its midstream cobalt imports from four countries: Belgium, the UK, the Netherlands and South Africa. Additionally, China will increase its exports to the USA, Spain, Norway, France, North Korea, Germany, Italy, the UK, Mexico, Ireland, Israel and other countries. For the downstream cobalt trade, Australia will increase its downstream cobalt imports from Germany, the Netherlands, the UK, Denmark, Israel and other countries. Additionally, China will expand its exports to Germany, France, Italy, Belgium, Poland, Switzerland and other countries. In general, China should strengthen its trade relations with the United States, Spain, Norway, France, Germany, Italy and other countries; Australia should strengthen its trade relations with Belgium, the United Kingdom, Germany, the Netherlands and other countries. This study provides a more objective and rational trade distribution strategy for countries participating in the cobalt industry chain trade.

Keywords: Sino-Australian diplomatic relations, Cobalt industry chain trade, Trade redistribution, Maximum entropy principle