Cobalt and lithium prices have surged as a rise in renewable energy has increased the need for battery storage solutions. However, the bubble may be about to burst for these metals
The automotive industry is on the verge of an electric revolution. The International Energy Agency has predicted the number of electric vehicles on the world’s roads will triple to hit 13 million by the end of the decade – and by 2030 that number could soar to 125 million.
Meanwhile, the rise of renewable energy generation has boosted demand for battery storage, which can balance intermittent power from green energy sources. The global energy storage market is expected to grow to more than 300GWh between 2016 and 2030, according to Bloomberg New Energy Finance (BNEF).
These new industries are powering demand for batteries, which has thrust a number of little-known metals into the spotlight. This has led to the price of lithium – a key component in lithium-ion batteries – doubling between 2016 and 2018. Meanwhile, the price of cobalt – a by-product of copper or nickel mining that is used in battery cathodes – has more than tripled since January 2016 (see Fig 1).
The surge in the value of these crucial components could be reaching its limit, however. In fact, as cobalt prices already start to drift lower and lithium stabilises, some analysts have suggested that the metals are on the brink of a crash.
Supply and demand
The market for lithium-ion batteries is growing rapidly. Used in everything from iPhones to electric vehicles, the power units are made up of a mix of metals, such as lithium, cobalt, nickel, manganese and graphite.
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