Fortune Minerals : COBALT NEWS

Yahoo! Malaysia News - January 27, 2021

Cobalt prices have soared by about a quarter since the start of the year, driven by the push for electric cars in China and the European ...

cobalt chemicals - many of which are used in the batterysupply chain - produced there. 'So, China has a big stake in the cobaltsupply

Cobalt prices have soared by about a quarter since the start of the year, driven by the push for electric cars in China and the European Union, as well as Chinese stockpiling, analysts said…On Tuesday, a tonne of cobalt was selling on the London Metal Exchange for US$40,000 - its highest level in two years. The metal is largely mined in the Democratic Republic of Congo (DRC) and shipped via South African ports to international markets…It has become a strategic metal because of its use in lithium-ion batteries for electric cars and mobile phones, as well as for making alloys for jet turbine blades…When Covid-19 had brought much of the global economy to a screeching halt in 2020, the cobalt market was not spared, but as economies slowly reopened, electric car sales had handily outpaced those with internal combustion engines, and this was underpinning cobalt demand, he said…Rawles said generous subsidy policies from European governments for the EV sector had contributed to the surprisingly strong electric car sales. Another factor in surging cobalt demand had been the boost in consumption of consumer electronics linked to home working, he added…Rising demand for the metal compounded in late 2020 when the Chinese State Reserve Bureau announced another round of cobalt buying, according to Rawles. The pandemic had also tightened supply, with some operations in the DRC halted because of Covid-19 restrictions…Refining of the metal in China - where more than 80 per cent of cobalt battery chemicals are produced - was also affected when coronavirus quarantine measures were imposed in the first four months of last year…Rawles said Benchmark was forecasting the market to fall into a slight deficit in 2021, which would grow over the coming years. 'We see the cobalt market falling into a slight deficit, with supply at 147,000 tonnes and demand rising to 148,000 - but by 2025 this deficit widens, with supply at 211,000 and demand at 238,000 tonnes,' he said…'This deficit is likely to bring about higher prices, which will incentivise new production, but the question is how quickly this new supply can be brought to market since typically this takes more than seven years, so too slow to react to imminent demand increase from the battery sector.'…China plays a significant role in the cobalt supply chain and has strategically positioned itself in its production and refining. Chinese companies have invested heavily in the DRC and the Central African nation is expected to continue being at the centre of cobalt supply for years to come…Last year, 75 per cent of the world's cobalt was produced in the DRC, and that dominance is expected to grow in the near term as major supply expansions are focused there too…As EV sales continued to ramp up, with China expected to account for at least 50 per cent of the market going forward, Berry said cobalt use in lithium-ion batteries could double by 2025…Rawles said that although there was little domestic production, China had a stake in a large percentage of overseas mining operations and was moving to acquire more…Besides raw material production, Rawles said China was even more dominant, with about 65 per cent of the world's cobalt in all forms refined in China, and around 85 per cent of the world's cobalt chemicals - many of which are used in the battery supply chain - produced there…'So, China has a big stake in the cobalt supply chain currently, and this is something we are expecting to grow in the coming years,' he said.