The cobalt market is facing significant volatility, with prices plummeting to their lowest levels since 2016. This downturn is largely attributed to slower-than-expected growth in the Western electric vehicle (EV) sector, coupled with the rise of lithium-iron phosphate (LFP) battery technology, which reduces the need for cobalt.
Despite these challenges, cobalt demand continues to increase, although at a slower pace. Adamas Intelligence reports that approximately 5,000 tonnes of cobalt were used in new-energy vehicles in May 2024, marking a 12% rise from the same period in 2023.
Unlike native metals such as gold and copper, cobalt is found only in combined forms within ores like cobaltite, erythrite, and skutterudite. The recent surge in global cobalt supply, primarily driven by expanded production in Indonesia and the Democratic Republic of Congo (DRC), has outstripped demand growth. In these countries, cobalt is extracted as a by-product of nickel and copper mining.
This over-supply has lessened the impact of low cobalt prices on overall production decisions. The DRC remains the world’s largest producer of cobalt, with major deposits in the Katangan Copperbelt region.
Glencore CEO Gary Nagle has stated that the cobalt market is “currently oversupplied” and is expected to remain so “for at least the next two years.” Glencore, a major player in cobalt extraction and processing, operates in the DRC, Australia, Canada, and Norway, mainly as a by-product of copper mining. Recently, it was overtaken as the world’s largest cobalt producer by China’s CMOC Group.
The current market conditions have created new opportunities, particularly for China, which had a strategic stockpile of about 8,700 tonnes of cobalt in 2023 and plans to acquire an additional 15,000 tonnes this year.
Industry experts and mining professionals are keeping a close watch on the cobalt sector, as the interplay between supply expansion, evolving battery technologies, and electric vehicle adoption rates will likely continue to influence the market dynamics in the coming years.
