Cobalt is hitting historically high prices fuelled by the automobile industry, which needs the rare metal to make light and durable electric batteries. The price per tonne of cobalt rose to $82,000 on the London Metal Exchange in mid-February, its highest level since it began tracking the commodity in 2010, and has almost tripled in value since the beginning of 2016.
However, the rapidly growing demand has not yet peaked, according to Darton Commodities, which specialises in the sale of cobalt. "The market is expected to remain in surplus supply until forecasts of exponential growth in electric vehicle sales materialise around 2020," said its annual report.
"During 2017, lithium-ion batteries used in portable consumer electronics still consumed around 72 percent of total cobalt consumed in (lithium-ion batteries)," Darton Commodities said, adding however that this share was likely to decline because of growth in the auto sector. "Electric cars came of age in 2017, with sales rising 51 percent," said analysts at Macquarie, noting that the halting of state subsidies for sales in China could slightly slow this growth in 2018.
In the rest of the world, more and more countries are planning to phase out petrol and diesel cars, prompting manufacturers to devise strategies to meet the demand for electric vehicles. In December, Swiss mining giant Glencore said it was in discussion with Volkswagen and Tesla to supply them with cobalt, according to managing director Ivan Glasenberg, quoted by Bloomberg.
-AFP, London
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