WoodMac cobalt forecast

Too many pointless posts i had to reply to so just started a new one. Decided to have a look at the commodity assumptions in the DFS. Found that they used 30$/lb cobalt.

Wood Mackenzie are a very respected commodity research group. You see references to them made regularly in DFS reports of various companies.


http://www.mining.com/new-study-rips-cobalt-lithium-price-bulls/

Woodmac expects prices to average a respectable $75,000 a tonne this year before easing back to $55,000 a tonne in 2019 before falling further to a low of little over $33,000 in 2020 and 2021.

https://www.woodmac.com/news/editor...s-to-transform-lithium-and-cobalt-industries/
49% of cobalt demand was from the battery sector last year.  By 2022, we forecast cobalt demand from batteries alone to reach 98 kt – or 61% of the cobalt market. While such a figure would have seemed unrealistic a few months ago, the incremental supply from Glencore, ERG and others now means that we expect significant surpluses in the years 2019 to 2022.

So by the time CLQ get into production, which according to the DFS is Q1 2021 - Q1 2023 (First production and Ramp up), they will be hitting the market when prices are expected to drop to $33,000/tonne. Compare to the prices now that is a massive drop. As cobalt contributes close to 40% of revenue, this will impact the financials of the project. This is just on the supply side so we don't know the impact of battery makers moving towards zero cobalt in 2021-2023 which could be a double whammy?