For those that are interested, Fastmarkets takes a look at some...

For those that are interested, Fastmarkets takes a look at some of the key factors at play in the cobalt market over the next 10 years.

5. A growing global cobalt surplus in the short to mid-term will keep prices below recent major highs
Recovering output growth following shutdowns during 2020 and a slowdown in cobalt demand from key end-use sectors like consumer electronics saw the global market enter a surplus last year. Prices were bearish through the second half of 2022. Logistics disruptions leading to parts shortages also meant constrained EV production and weaker cobalt demand. Significant planned capacity additions in the DRC and Indonesia are expected to widen this surplus in the short term, adding further pressure to cobalt pricing.

Cobalt’s future balance will not be completely determined by its own market dynamics. The outlook for copper and nickel is that of rapidly increasing demand as requirements for the global energy transition ramp up. In the EV sector, a growing shift towards high-nickel, lower-cobalt loadings are likely to mean cobalt remains well supplied. Longer-term forecasts for nickel and copper are set to drive production increases in cobalt as a by-product, while developments in primary cobalt mines remain small scale.

https://www.fastmarkets.com/insights/cobalt-market-outlook-five-key-factors



Note: Most cobalt is produced as a by-product (from nickel or copper production). Producers do not start or stop nickel or copper mining on the basis of the cobalt price. So, it is entirely possible for the cobalt industry to keep producing, for years or even decades, at less than the all-in cost of cobalt production.

But a stand-alone cobalt mine must cover its all-in costs from cobalt alone.

The effect of this is that cobalt prices, as with many other by-product metals,  can be below production costs for long periods of time. The primary producers are always the first to leave the business as the price falls (eg. Jervois Global Limited, ASX: JRV).

The problem with bets on price cycles is that prices can remain low for a long, long, time.

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.