In the US, Washington’s concerns over China’s dominance of the cobalt supply chain have led to substantial incentives for cobalt production domestically or in countries deemed friendly to America. Lower cobalt prices provide some relief to automakers worried about the cost of raw materials for electric batteries, but raise big challenges for getting projects outside of China off the ground. One trader said there was a “double whammy” as Chinese cobalt refineries and consumers destocked due to weaker consumer demand, but the market was now asking “when does China come back” in terms of demand. Demand was hit by soft sales of portable electronics globally, draconian Covid-19 lockdowns in China and a shift in the Chinese electric vehicle market towards lower-range batteries that do not use cobalt.Ĭhina’s smartphone sales slumped to a 10-year low in 2022, according to research firm Counterpoint, and the batteries in electronic devices are made up of about 60 per cent cobalt versus generally less than 10 per cent for those used in electric cars. The supply surge was more than double the demand increase, leading to the price collapse. That was driven by Swiss commodities group Glencore ramping up production at Mutanda, the world’s largest cobalt mine in the Democratic Republic of Congo, as well as Indonesia emerging as a major producer. Global cobalt output increased 23 per cent or by 35,000 tonnes in 2022 over the previous year, according to Darton. “A lot of things converged at the same time to push the market down: the relaxation of logistics issues, weak consumer electronic sales and a technology shift towards lower or no cobalt EV batteries,” said Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, a pricing agency. The increase comes despite western efforts to gain control over supply chains for critical minerals such as cobalt, lithium and nickel, which are essential for making electric-car batteries.Ĭhinese refining activity reached 140,000 tonnes in 2022, more than double its level of five years ago, as volumes processed in the rest of the world stagnated at the 40,000 tonnes mark, handing Asia’s largest economy a 77 per cent global share of refining capacity.Ĭhina’s growing role in cobalt supply comes as a 12-month rally for the metal has spun into reverse, with prices dropping 60 per cent to $16 a pound, from their peak above $40 a pound in May. Over the next two years, China’s share of cobalt production is expected to reach half of global output, up from 44 per cent at present, according to a report by Darton Commodities, a UK-based cobalt trader. Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Ĭhina is set to tighten its grip on global cobalt supply, as the price of the key metal for electric-car batteries hits a 32-month low off the back of a surge in production.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |