VINACHEM

The price of standard-grade cobalt has fallen to its lowest so far this year in the week ending Friday September 20, on slow demand and continued oversupply.

The price of cobalt metal declined on September 19 to its lowest since January 2016, before recovering again on September 20.

Fastmarkets’ daily price assessment for cobalt, standard grade, in-whs Rotterdam, was $10.00-11.85 per lb on Friday, up from $10.00-11.80 per lb on Thursday.

Oversupply in the cobalt market has increased this year, driven by greatly increased volumes from some miners in the Democratic Republic of Congo (DRC). Chinese miner CMOC, the world’s largest cobalt producer, reported a 178% year-on-year increase in cobalt metal production in the first half of 2024.

“The damage has already been done to the market, from a production perspective,” a trader source said. “The amount of supply will take a long time to clear.”

According to Fastmarkets’ analysis, the total mined supply for cobalt was 232,000 tonnes in 2023, and was forecast to be 264,000 tonnes by the end of 2024.

CMOC said last month that it expected the growth of cobalt supply to gradually ease in the second half of the year. “After the existing supply increment is released, it is expected that there will be no new resources for a long time,” it said.

“I think we have definitely seen peak oversupply [for cobalt],” a European trader said.

“The cobalt market is in a bad state,” a consumer source said, “but electric vehicles [EVs] are still going to be needed by the end of the decade. Analysts are seeing year-on-year growth in demand [for cobalt to be used in EV batteries] but the level of supply is also increasing.”

Some market participants attending Fastmarkets’ European Battery Raw Materials conference in Amsterdam, September 16-18, remained pessimistic about the cobalt market, however.

“The market is challenging at the moment, for us and our customers,” a third trader source told Fastmarkets. “We’re looking to see how we can navigate it for next year.”

Cobalt, which is mined as a by-product of copper in some areas, has faced worsening oversupply due to an increase in the production of copper in the DRC. Rising copper prices were an incentive for an uptick in copper mining, and a consequent increase in the output of cobalt.

CMOC’s copper metal production in the first half of 2024, at 313,788 tonnes, was a 101% increase from the previous year.

“The major growth in cobalt mined supply has come as a result of bullish prices in the copper market in the first half of 2024,” Fastmarkets analyst Robert Searle said. “The DRC is now the world’s second-largest copper-producing country.”  – Source: Fastmarkets –