Cobalt prices have nearly doubled in the first quarter of the year as demand for its use in rechargeable batteries and the electric-vehicle market, in particular, is expected to take off. The Northern Miner spoke about the dynamics of the cobalt market with Edward Spencer, a senior consultant and head cobalt market analyst at the CRU Group in London.
Spencer joined CRU in 2015 as a senior consultant to CRU’s nickel, stainless steel and special alloys group, and has also worked on outlooks for molybdenum, nickel and ferrochrome. He has a PhD in economic geology from Imperial College London, where he specialized in the decoupled mineralization of base metals.
The Northern Miner: Where have cobalt prices ranged over the last year or so?
Edward Spencer: The price of 99.8% cobalt metal started at US$10.25 per lb. in January 2016 and ended the year at US$14.15 per lb. The prices have really ramped up in the first quarter of 2017, however, increasing from US$14.15 per lb. at the start of January, to US$27.75 per lb. at the end of March — nearly doubling over the three-month period.
Last year, the annual average price for 99.8% minimum cobalt metal just came in at around US$12.1 per lb. If you look at that on an annual average basis, the last time it was that low was in 2003, and, in real terms, 2002 was even lower. So we are seeing 14-year lows on the cobalt price on an average annual basis in 2016.
Part of the reason why we were so bullish last year was because we were scraping along the bottom and yet there is all this growing demand for things like electric vehicles. So we were always anticipating a big price response in 2017. Essentially, there were some gains towards the end of 2016, the price went up by around US$2.00 in the last six months of 2016 to around US$14.15 per lb. at the end of the year. But this was only the beginning of the surge that we have seen in 2017.
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