Interesting article from Benchmark Minerals about the new pricing mechanism for cobalt moving forward. Since cobalt metal now takes up a smaller % of the overall cobalt use, the chemicals will be priced differently—good news for COB on the refinery side imo. Looking forward to seeing some numbers in the DFS later this year. ____________________________
“The share of battery demand, primarily using cobalt sulphate, is rising in importance for the entire cobalt market and as a result the metal market is becoming less important,” said Harry Fisher, analyst with Benchmark.
Global cobalt demand is set to double by the end of the decade, driven by battery applications in electric vehicles. Battery demand for cobalt is expected to reach more than 320kt tonnes by 2030, or about 84% of the total cobalt demand, according to the Benchmark Cobalt Forecast, up from 75% this year.
Metal production accounts for about 18% of the cobalt market currently. Of this, only 10% to 15% is traded on the spot market, implying that the metal reference price represents a minority share of the cobalt market.
Moreover, as the EV battery industry continues to expand, whilst demand from metal consuming sectors remains relatively flat, this share will decrease further.“
There has been significant growth in the chemicals market over the last decade, whilst the mature metal market’s growth has been marginal,” according to a Cobalt Institute report prepared by Benchmark.
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Looking at the SMM (Shanghai Metals Market) it's clear to see that the metal and sulphate prices are not linked and according to Benchmark this is set to diverge further as the percentage of metal use will be less compared to sulphate as the EV demand grows.
COB Price at posting:
23.5¢ Sentiment: Buy Disclosure: Held
