July 31, 2018
Battery chemical surplus sparks plunge in cobalt price
Author: Pratima Desai
LONDON (Reuters) - A surplus of cobalt chemicals used to make the rechargeable batteries that power electric vehicles has seen Chinese refiners switch to producing metal, sending prices down 30 percent in recent months.
The electric-vehicle revolution is expected to boost demand and prices for cobalt, which stabilizes and extends the life of lithium-ion rechargeable batteries. However, such a shift is unlikely to happen until the next decade, when production and sales of electric cars are seen ramping up significantly.
The rise in London Metal Exchange cobalt to a contract high at $98,000 a tonne in April stemmed from robust demand among traditional sectors such as jet engine makers and falling metal supplies, not - as many believe - surging demand from battery makers.
Prices have since crashed to around $69,750 a tonne as cobalt metal started to come out of China, trading sources said.