JRV (ASX) JRV Cobalt

Originally posted by mondyinvest: ↑

Morning all,

Last night I listened to a Fastmarkets seminar on the Cobalt market outlook for 2022. I was cleaning the kitchen after a big family cook-up, so these notes were scribbled after the fact so they might be a bit sketchy. There wasn't really much in there that a keen follower of JRV/cobalt wouldn't already know, but I share them in case they're of use. In no particular order:

Recycling will be a big play for cobalt however the market needs to mature first for this to come through from the EV side. Currently with high prices, the recycling side will be focused on consumer electronic batteries etc, it may take a few years yet for the EV batteries to reach end of life and enter the recycling stage.
Cobalt spot traded thinly over Christmas period (not unusual) but starting to pick up again, although given concerns over security of supply, there is a lot more action in LT contracts out to 2024.
On the trading side, banks are getting involved as a commodity hedge play which the guy from CME Group thought was quite interesting - for a metal with a small(ish) market overall, it's not just end users buying, but speculators (possibly like the uranium space - my comment, not theirs).
On the EV side, demand for cobalt continues to be strong despite the well-publicized desire by OEM's to move away from cobalt where possible (LFP battery share is growing) or to move the cobalt share in the NCM battery down. The key concerns around security of supply is being addressed from changes in DRC which is a positive for the metal. However the move to LFP batteries has other factors at play, such as the Chinese subsidies for EV's which required the EV's to be below a certain price (hence the desire for a cheaper LFP battery to be used in these vehicles).
On the traditional industrial use side, demand from aerospace has not recovered but this is expected to change mid-this year.
The sharp increase in lithium prices in 2021 (between 250% to 450% depending on type) has made some traditional cobalt buyers nervous that something similar could happen, hence the focus on LT contracts.
Logistics related disruptions are squeezing margins for players so that is something to keep an eye on.
Cobalt has run fairly hot in 2021 but Fastmarkets aren't expecting the same sort of run in 2022; there may be further positive price movement in Q1 but if anything it could plateau then cool off towards the end of the year.
Finally, it appears Jervois got a mention (indirectly) when it was noted that more cobalt would likely come "from that smelter in Brazil". Funnily enough the analyst was responding to a question which was along the lines of "do you see any new cobalt supply coming out of Australia" so I wonder if it was a COB holder trying to get a mention (or perhaps one of our mob!).

Cheers,
m

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Thanks for sharing mate. Very meticulous notes.
There is just so much happening that justify our investment into battery materials (some of us have waited very patiently for these market forces to build). I have 30% portfolio allocation into lithium and what's happening with demand and supply is nothing short of spectacular. Same will happen to nickel and cobalt and I have no doubt JRV trading arm in Swiss will exploit that market imbalance like child's play.

On another note, you all may have noticed speculations around BHP running a ruler on Glencore and freeport. If BHP takes out Glencore that will be one hell of a move. I also think they will take out some big lithium player. Thoughts?

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Last 2.2¢		Change 0.000(0.00%)		Mkt cap ! $59.45M

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Last updated 15.59pm 25/04/2024 ?

Thanks for sharing mate. Very meticulous notes. There is just so...

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