I reckon the Cobalt price will continue to be elevated for at least the next few years because of several factors. It may sound cliched but I think it's appropriate to say it is like a perfect storm of factors converging.
The price of other battery materials have all gone berserk. Lithium price has gone to the moon, as well as the Nickel price thanks to Russia. For a battery maker considering costs and quality of product, the changed material costs would surely warrant a reconsideration of the battery chemistries used. The case for LFP batteries is a bit stupid now. A simplistic view: Would you spend $1000 on the lithium in the battery, and then try to save $50 by using Iron instead of cobalt in the final product? You end up with either a $1050 barely good enough battery, vs a $1100 high performance battery. It's a no brainer.
Another factor that I think nobody is thinking about is the outlook for the passenger jet industry. Both Boeing and Airbus have had incredible order books in 2021. Airbus hit their sales target, Boeing had one of the best years on record (or THE best, I can't remember). Before all the hype around its use in EV batteries, Cobalt was mainly used in jet turbines, and in this case there is simply no substitute for Cobalt. The passenger jet alone is enough to sustain a high Cobalt price.
Next, you've got all the ructions happening in the DRC. They kicked out China Moly from their world's biggest Cobalt mine, Tenke Fungurume. I've always thought the timing of the China Moly majority ownership of Tenke Fungurume was suspiciously coincidental to the crash of the Cobalt price. No sooner had they gained the majority, the price crashes. It is also abundantly clear that China does not want high commodity prices; look what they tried to do to the Copper price not too long ago.
The DRC then banned the exportation of raw ores, and before that they also got their artisanal miners to fall inline with the Gov by giving them a formal framework to make a living out of it.
All in all, it is a cacophony of factors making the Cobalt outlook extremely bullish. It is certainly very different from the last time Cobalt price reached north of USD$90k, which was mainly caused by speculators hoarding stock.
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