Cobalt Outlook 2017 - Price Revival Expectations

Mining & Minerals - Evaluations / Other Metals

Date posted: 12/28/16

Priscila Barrera reports that Interest in the cobalt market started to rise a couple of years ago when Tesla announced the opening of its lithium-ion battery gigafactory. Cobalt, a raw material needed for these batteries, is on track for a price surge in the next few months as the electric car revolution unfolds. Prices for cobalt metal COB-CATH-LON are expected to rise 45% to above $16 a lb by 2020 from $11 at present, as stricter emissions controls boost demand for electric vehicles and push the market into deficit from this year, analysts said. Chris Berry, of House Mountain Partners and the Disruptive Discoveries Journal, said: Cobalt was finally discovered this year. The cobalt price on the LME is up by 25% year-to-date and it looks like other forms of cobalt chemicals have enjoyed similar strength. Last year, only 37% of cobalt was consumed in metallurgical applications and global demand is expected to continue to shift towards non-metallurgical applications. To add to the rising demand, the market could tighten substantially as political and human right concerns continue to put the Democratic Republic of Congo, the top producing country, in the spotlight. Earlier this year, Amnesty International released a report showing that major tech companies are not ensuring that their products do not use cobalt mined by child laborers. In addition, concerns about the presidential election in the country could compromise cobalt mining operations. IHS Automotive expects electric vehicles to represent nearly four percent of all light vehicles worldwide by 2020, equivalent to 3.9 million cars, up from just over 14,000 in 2010. A rising demand for lithium-ion batteries in these vehicles and other electronic devices is expected to drive the cobalt market, among other metals, in the next years as producers will need to secure their raw materials supply. The biggest driver at the moment in the cobalt market remains electric vehicles.