Europe needs way to price critical minerals independently of China, group says
Oversupply and weak prices of materials such as lithium, cobalt and rare earths are dampening cash flows of Western start-ups.
Cobalt prices are expected to stabilize in 2022 after trading at their highest levels in three years, according to Fastmarkets MB.
The cobalt price rose by 10% in November, breaking through $30 per pound for the first time since the end of 2018, according to Benchmark’s Cobalt Price Assessment. Prices have risen by 92% year-to-date.
“With greater interest in lithium iron phosphate (LFP) battery chemistries and with EV sales still potentially likely to suffer from the semiconductor shortage, we would not be surprised if the current rise in cobalt prices is limited and if prices fall back again as the fourth quarter of 2021 progresses,” said Fastmarkets.
“We think prices are near their peak as we expect production increases in 2022, combined with weaker than expected demand from consumer electrics, due to semiconductor shortages, plus the surge in LFP demand, to weigh on prices.”
In a recent note, S&P Global Platts said the metal’s prices are set to fall 8.3% in 2022 as supply chain bottlenecks ease.
S&P forecasts total cobalt demand to rise to 195,000 mt in 2022, up from 132,000 mt in 2020 and an estimated 170,000 mt in 2021.
“Although, with supply also climbing, the overall cobalt market balance was expected to return to a surplus of 1,000 mt in 2022, after moving into an estimated deficit of 8,000 mt in 2021 from a surplus of 4,000 mt in 2020.”
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