LONDON (Reuters) – Cobalt’s near year-long price slide is finally coming to an end, but high inventories of the battery metal will stop prices quickly re-claiming 2018’s 10-year highs.
London Metal Exchange prices have crashed to two-year lows of $32,000 a tonne compared with levels near $100,000 in the first half of 2018.
The drop was sparked by rising supplies from the artisanal and industrial sectors in the Democratic Republic of Congo and a surplus of cobalt chemicals, used to make rechargeable batteries to power electric vehicles, in top consumer China.
Traders looking to buy cobalt to cover forward sales are expected to help a price recovery, but industry sources say it is likely to be muted as high stocks in Africa will provide a buffer against supply shocks.
The DRC accounts for most of the world’s cobalt supplies. It comes in the form of hydroxide which is converted into chemicals for the lithium-ion batteries also used in mobile devices.