Cobalt Prices Reach 2-Year Lows as Congo Increases Supply
Car manufacturers rely on a number of different precious metals in the production process. Between key battery materials like Lithium, which is under a tight supply and seeing prices rise, other minerals are facing a different economic situations. Cobalt, a key battery metal, has fallen over 40 percent since mid-November, trading between $18.75 and $20.35 a pound. This decrease marks the lowest the commodity has reached in over two years.Most of our adventures in cobalt, and then the pivot to ruthenium are linked in this piece from July 2018:
Cobalt has seen a drastic drop in price just over the past year. Back in April 2018, the metal reached a 10-year peak of over $40 a pound, which compelled many battery makers to invest in lower-cobalt battery designs. However, the massive drop in prices will likely ease fears for current battery technology and help ease a swifter rollout of electric cars. At the same time, many companies could be tempted to lock in prices in long term contracts with miners.
“Not only will this enable [carmakers] to feel more secure about future pricing and act more aggressively on their electric vehicle production ramp-up plans, but longer-term deals may also sustain higher levels of cobalt use in [battery] cathode technology,” said Benchmark Mineral Intelligence analyst Caspar Rawles, according to The Financial Times.
Many companies in the battery supply chain already have stockpiles of cobalt saved up, with the market not likely to be low in supply going forward into 2019. The Democratic Republic of Congo produces two-thirds of the world’s cobalt, with an estimated $24 trillion in untapped mineral deposits in the country at the moment.
However, low prices won’t last forever, and are expected to return in the coming years. “The upward price movement is likely to be achieved through a combination of restocking, improved investor sentiment, supply disruptions and, last but not least, a strong underlying demand for electric vehicles,” said Benedikt Sobotka, chief executive at Eurasian Resources Group. “New energy vehicles remain the most potent driver for cobalt demand, and it is forecast that 2019 will see even strong growth rates than 2018.”
At the same time, however, many auto manufacturers are finding themselves in a tricky situation. Worried about fluctuations in supply as well as relying almost exclusively on an African country that has been unstable in the past, many carmakers are considering investing directly in cobalt mines to secure their own supplies in the coming future....MORE
Lithium Is Dead For Now: What's Next?
...Well, cobalt futures quadrupled on the LME and in fact the blue stuff was the best performing portfolio commodity in 2017.
August 2017
Eighteen months ago we went with cobalt over lithium as the battery material that would be in shortest supply and think that is still a correct assessment. However, if long-suffering reader is interested the 'search blog' box has quite a few hits for 'lithium'.... But all good things come to an end:
(LME cobalt)
source: tradingeconomics.com
And even though we didn't have an interest in lithium we kept track of it:...
