Cobalt Prices Plummet as EV Uptake in Europe Stalls

The pattern of volatility in the battery metals sector continues apace, with cobalt prices currently reaching their lowest point since 2106. 

Slower-than-anticipated growth in the Western electric vehicle market is to blame, and this has been compounded by the emergence of lithium-iron phosphate battery technology that precludes the need for cobalt. 

Despite these challenges, demand for cobalt continues to grow, albeit at a reduced rate. 

Adamas Intelligence, which provides intelligence on rare earths and battery materials. reports that an estimated 5,000 tonnes of cobalt were used in new-energy vehicle sales in May 2024, a 12% increase on the same period in 2023.

Cobalt is not found as a free, or ‘native’ metal, like gold and copper, but rather in a chemically combined form in ores, including cobaltite, erythrite and skutterudite.

The surge in the global supply of cobalt has outpaced demand growth, mainly due to expanded production in Indonesia and the Democratic Republic of Congo (DRC). In these countries, cobalt is extracted as a by-product of nickel mining (Indonesia) and copper mining (DRC).

This limits the impact of low cobalt prices on overall production decisions.

Congo is world's leading producer of cobalt

Congo is the world's leading source of cobaltite ore, with major deposits found in the Katangan Copperbelt region of the country, which is rich in copper-cobalt deposits.

Glencore CEO Gary Nagle has said the cobalt market is “currently oversupplied” and that he expected it to remain so “for at least the next two years”. 

Glencore extracts and processes cobalt in the Democratic Republic of the Congo, Australia, Canada and Norway, mainly as a by-product of copper mining. Recently it was surpassed as the world's largest producer of cobalt by China's CMOC Group. 

The depressed market has created opportunities for some. China had a strategic stockpile of an estimated 8,700 tonnes of cobalt in 2023, and plans to buy an additional 15,000 tonnes this year. 

Mining professionals and industry observers are closely monitoring the ongoing volatility in the cobalt sector. 

The interplay between supply expansion, evolving battery technologies, and electric vehicle adoption rates will likely continue to shape the market landscape in the coming years, reports Reuters.