Benchmark Mineral Intelligence has initiated its cobalt coverage and anticipates to begin monthly price assessments for cobalt chemicals used in lithium ion battery cathodes by Q1 2017.
For more information contact Caspar Rawles, Analyst, firstname.lastname@example.org (@CDMRawles)
Political rumblings in the DRC may have a major impact on the price of cobalt.
It has been well documented that Joseph Kabila, the country’s president, is trying to make changes to the constitution to allow him to run for a third term.
The Bureau d’Études, de Recherches, et Consulting International (BERCI) and the Congo Research Group (CRG) at New York University ran an opinion poll, it found that an alarming 81.4% would not accept the change.
True, that the BERCI and CRG researchers interviewed 7,545 people in face to face interviews, and with an estimated 81.m population this has to be considered a very small sample size. But if the poll is representative of the general feeling if the nation then it may well spell trouble in the cobalt market.
Kabila is due to end his term on the 19th of December, and yet he still tries to cling on to power after this official date. The government are claiming they require more time to complete the voting registration but it seems the people of the DRC are wary of these all too familiar stories to stave off the vote.
The Financial Times states: “This month, the government cobbled together a power-sharing agreement with a sliver of the opposition. The article goes on to say that worryingly this agreement down not include the main opposition”.
Chinese cobalt demand in the run up to the 2008 financial crisis and political instability in the past has caused the most significant price spikes seen in cobalt, most notably when prices were over 50USD/lb in 2008 – a 245% price increase in 18 months for cobalt metal.
Benchmark Mineral Intelligence does not believe we will see these levels again, among the most extreme in the speciality minerals space, but the 19th of December is certainly a date to mark in your dairy.
This instability and uncertainty combined with the increased demand coming from the energy storage revolution: Benchmark data shows 2015 total global supply at 100,000 tpa, of this the battery market consumed 48,000 tpa.
With a lithium ion battery production surge well under way – and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from 3-35 GWh capacity – lithium ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.
With DRC so dominant in global cobalt supply, accounting for nearly 60%, and no new supply expected outside of the African country anytime soon, this could this spell the start of the true squeeze of the cobalt market that many have expected.
While 2016 has already seen some price rises in cobalt metal primarily due to falling supply and strong cobalt chemical demand, the supply and demand dynamics over the next 18 months point towards significant price increases.