![]() ![]() “I don’t think investors should be too concerned, as we see absolute cobalt demand continuing to increase throughout the demand,” Miller said. “EVs remain the real driving force of the cobalt market and will continue to see substantial gains in 2022,” Fisher said.Īs mentioned, this past year, worries among cobalt investors increased as the use of LFP cathodes picked up pace, with many speculating how much this could impact the cobalt space. It has been clearly established that the EV industry is a key driver for cobalt, with demand increasing this past year on the back of higher sales that materialized in key regions such as Europe. How could supply and demand factors affect cobalt prices in 2022? Cathodes containing cobalt include nickel-cobalt- manganese (NCM) and nickel-cobalt- aluminum (NCA). The growing LFP cathode market in China was a topic of concern for many cobalt investors in 2021, as this type of cathode - which is also used in electric car batteries - doesn’t use cobalt. “Prices in the Chinese domestic market failed to keep pace with other regions, in part due to negative sentiment over growing lithium- iron- phosphate (LFP) utilization, with refiners reporting that they were operating at a loss for much of the quarter,” he explained to INN. Surplus inventory held mainly in the hands of traders, paired with limited metal production in China through the year ― which is the traditional counterweight to price rises ex-China ― were also factors pushing prices up.Ĭommenting on the biggest surprise of late 2021 in the cobalt market, the Benchmark Mineral Intelligence analyst said it was the extent to which the China and ex-China markets diverged. The upswing in prices was underpinned by several converging factors, Miller explained, which included increased restocking from industrial sectors and ongoing disruptions to supply chains globally. That means it wasn’t just the bullish outlook for battery demand that helped cobalt in 2021. “The cobalt market outperformed expectations in Q4, as the cobalt metal price rally sustained throughout the quarter ― although this was not altogether a surprise considering market fundamentals,” Greg Miller of Benchmark Mineral Intelligence told INN. Experts expected that cobalt would finish the year more than twice where it started in January 2021. Market conditions remained very strong during the first half, and prices continued to rally through Q4. “Price performance has certainly surprised to the upside this year, but it reflects strong downstream demand, particularly from EVs, which have continued to outperform market expectations, and tight market conditions overall,” Harry Fisher of CRU Group told INN.Ĭobalt kicked off 2021 on an uptrend as investors turned their attention to the EV sector and battery metals. Looking back at how prices performed in 2021, there’s little doubt that cobalt beat expectations after a 2020 that brought a price rebound following years of decline. ![]()
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