One does not usually expect a sober conference of traders and other players in the battery metals space to go all apocalyptic but that is what happened when the topic of Cobalt arose at the recent Argus Metals Week in London. As we all know the price for Cobalt has been on a tear, dragging along prices of Cobalt “stories” in its wake.
While much of the move has been attributed to the Lithium ion battery dynamic we would note that long term underinvestment in the metal (particularly in development of primary mines) and the closure of Cu-Co mine capacity by Glencore during its late-2015 near-death experience also played a part.
The pace of change in the battery space has moved up a gear with the Cobalt crisis moving into centre stage and focusing minds on supply issues in the battery space, particularly as regards the “blue” metal. The Cobalt producers have annual output of around 100,000 tonnes.
The price of Cobalt has soared (though still not back to pre-2008 levels) and the chatter in markets has been of an imminent supply crunch in absolute terms that might precipitate rationing by price and possible switching to alternative technologies.
While opinions differed on just how steep the rise in prices might ultimately be, we perceived an even bigger threat in that there might be an absolute shortage of Cobalt, transitory or longer, in which case end-users (and by that we mean beyond just the battery space) may not be able to secure Cobalt for “love nor money” as they say in the classics. One might compare it almost to like a situation of war-time shortage when “nylons” or suchlike might have totally disappeared.
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