Reading this article, Nov 8 2018, a fair example of cobalt market impressions of the time,
http://www.mining.com/cobalt-price-rally-30-mid-2019/ ...........these so called analysts cited (link within linked article) they believed the cobalt price would (after the radioactive cobalt discovery by Glencore’s subsidiary) shoot up to as high as $90,000 a tonne.
So, yes in hindsight no one it seems knew for sure what would happen with the cobalt price.
Now many upon seeing the Katanga Mining radioactive cobalt news would have thought the same………. cobalt $ goes up.
But the background drama is the following from an analyst intimate with the market:
Huayou withheld cobalt, a massive amount to manipulate prices. Then got ‘compromised’ when the cobalt price dived and they tried to dump their inventory.
Based on the ‘trying’, I asked this analyst why they had trouble dumping and was advised it is because Huayou and a few others were doing it…………. it was a game of chicken apart from whoever broke ranks and sold first made all the money with the others severely ‘compromised’.
I asked when would the cobalt price recover, and I was told “hoping this year however it depends on how much more inventory Huayou and others still hold”.
Now, going back to that mining.com article,
“Capital Economics expects cobalt prices to strengthen further, reaching $80,000 by end 2020, largely thanks to battery demand”
Not that we can depend on Capital Economics forecast (they didn’t see what the analyst I spoke with saw)………….though we can see EV sentiment is escalating……….it’s worth considering this low cobalt price is not a feature of historical ‘normalisation’ such a reading is blind to the macro-economic developments occurring with electric vehicles, not to forget even the golden hand-shakes by the US with the new Congolese leader, all with a view to attaining access to the Saudi Arabia of battery materials.
Cobalt market is hot even when the price is low……… it’s why the price dived that is misread and poorly misunderstood by many an analyst who are not in the thick of it or cannot officially state why for fear of being cold shouldered. Investors have to be careful………. for example Ganfeng re lithium, would only tell price reporting agencies what they want the market to know. You have to delve and delve.
The cobalt price is in my view based on macros in the market trending bullish......... the dive in cobalt price is likely a good thing, because is it possible we get the same kind of price shocks again after this round of dumping?
Volatility is always there no doubt.
For some here to say, effectively, that WFE missed it’s ‘casino cobalt price wave’ would be, you would think, tongue in cheek incredulous remarks even for those who make them?
All IMO & DYOR
