https://www.miningweekly.com
Aviation|Industrial|Products
Aviation|Industrial|Products
aviation|industrial|products

New markets expected to drive cobalt demand

26th November 2020

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

Font size: - +

Although faced with many challenges, UK-based research group Benchmark Minerals forecasts that growth in the battery sector will drive cobalt demand, outweighing falling cobalt intensities in individual cells.

As such, it forecasts the battery industry will require a further 100 000 t of the mineral by 2025 – a 150% increase over the five-year period.

Benchmark reports that while cobalt prices have shown positive signs of late, there are nuances within the market that highlight the key fundamentals that will likely decide cobalt’s future price trend – which is taking its cues less and less from the industrial metal supply chain.

Since Benchmark’s July cobalt price assessment, the metal’s prices have risen 15% in comparison with the most recent data published at the end of October. However, Benchmark notes that while these price rises seem promising, the cobalt metal market’s outlook in the medium term, at least, has mixed prospects.

Further, the organisation points out that news that China’s State Reserve Bureau is stockpiling cobalt metal alongside the recovery in some industrial markets has supported these price rises of late.

In addition, metal buying by the battery supply chain for conversion to cobalt chemicals in summer, linked to hydroxide tightness, supported prices and drew down inventories of those holding stock of the correct physical form of metal suited to conversion.

However, Benchmark also notes that the prospect of a second wave of Covid-19 infections has now become a reality in many regions in the world. With this uncertainty, the organisation sees reduced activity in the aviation industry, which is the key consumer of the metal. It, therefore, also expects lower demand.

PERFORMANCE TO DATE

Despite these uncertainties, Benchmark highlights that cobalt has enjoyed a relatively good price performance during the second half of the year to date.

On what is driving this increased demand, Benchmark highlights that such an uncertain demand outlook is usually detrimental for metal pricing.

However, positive sentiment around battery demand for cobalt chemicals is now the key indicator for future price trends in the market, outweighing the bearish sentiment around metal demand from traditional markets in the near term, according to Benchmark.

The electric vehicle (EV) market’s second-half recovery has been strong, with China having had its best quarter in over 12 months and Europe posting surging EV sales numbers, up over 101% from January to February compared with the same period in 2019.

This, coupled with better-than-expected demand for portable electronics applications, linked to home working, and mobility products such as eBikes, has seen the sentiment for the outlook for cobalt demand from the battery supply chain improve considerably from where it stood at the start of the pandemic in early 2020.

As such, Benchmark notes that, as demand from the battery sector grows, it is natural that it becomes the driving force behind prices and sentiment.

While activity in the metal supply chain will always remain important to the cobalt market, Benchmark notes that a shift is resulting in greater emphasis on cobalt hydroxide, and the availability of this feedstock to the battery market.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Latest News

Resources Watch
Resources Watch
27th March 2024

Showroom

Booyco Electronics
Booyco Electronics

Booyco Electronics, South African pioneer of Proximity Detection Systems, offers safety solutions for underground and surface mining, quarrying,...

VISIT SHOWROOM 
John Deere (Pty) Ltd
John Deere (Pty) Ltd

In 1958 John Deere Construction made its first introduction to the industry with their model 64 bulldozer.

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.15 0.188s - 114pq - 2rq
Subscribe Now