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ELECTRIC-CAR MAKERS ON BATTERY ALERT AFTER HEDGE FUNDS STOCKPILE COBALT - Suppliers to Tesla and other electric carmakers are scrambling to secure shipments of the key battery material cobalt after a group of hedge funds amassed a large stockpile of the scarce metal.
In a bold wager on higher prices, half a dozen funds, including Swiss-based Pala Investments and China's Shanghai Chaos, have purchased and stored an estimated 6,000 tonnes of cobalt, worth as much as $280m, according to the investors, traders and analysts. The stockpile is equivalent to 17% of last year’s global production of the metal, says the Financial Times. Increasing use of batteries containing chemical forms of the metal by Chinese electric carmakers, alongside ambitious plans by the likes of Elon Musk’s Tesla, have created a fertile backdrop for speculators hoping to profit from swelling appetite for cobalt, which boosts the power of lithium-ion batteries. They are betting that demand for electric vehicles will exceed market expectations and push the up the price of cobalt as battery makers such as Panasonic, which makes battery cells for Tesla, rush to lock-up supplies of the material.