Market Outlook
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Cobalt Market Outlook
Cobalt Market Size
By 2025, the worldwide cobalt market is expected to grow at a CAGR ( Compound Annual Growth Rate ) of more than 9%. The market is divided into battery chemicals, superalloys, hard metals, ceramics and pigments, catalysts, and others based on application. Lithium cobalt oxide ( LCO ), lithium nickel manganese cobalt ( NMC ), and lithium nickel cobalt aluminum ( NCA ) oxide are the three types of battery chemicals.
Cobalt is a brittle silver-colored metal with a high melting point that is prized for its great strength and wear resistance at high temperatures. Cobalt is one of three naturally occurring magnetic materials that exhibit magnetism at temperatures above 1121°C. In other words, cobalt has excellent catalytic characteristics and has the highest Curie point of all metals, making it suited for use at greater temperatures.
Cobalt was mined in at least 14 nations in the late 1990s. The Democratic Republic of the Congo ( DRC ), Zambia, Canada, Russia, and Cuba were among the 14 countries that accounted for approximately 90% of global output. Cobalt was mined in over 15 nations in 2000, with the top six countries accounting for nearly 86% of global cobalt production. The structural collapse of a major copper-cobalt mine in the DRC in the 1990s decreased the country's cobalt ore production in 2000. However, from 2000 to the present, cobalt has been mined in nearly 20 nations, with DRC accounting for roughly half of the total. Other important cobalt producers include China, Cuba, and Russia, which account for less than 65% of global cobalt production.
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Cobalt reserves worldwide as of 2018, by country (in metric tons)
Cobalt Demand
Due to recent technological developments and government initiatives meant to promote the use of electric vehicles (EVs), demand for cobalt—a crucial ingredient in the production of lithium-ion batteries (LIBs) used in EVs—is increasing. This has prompted major automakers, battery manufacturers, personal electronic device manufacturers, and their suppliers to work around the world to ensure reliable supplies and explore new cobalt sources. Furthermore, increased cobalt demand has resulted in worldwide supply limits, higher pricing, and renewed interest in battery materials research for potential cobalt alternatives.
Cobalt demand nowadays can be divided into two types of uses: metal and chemical. Cobalt's relevance in metal industries, such as the manufacturing of superalloys and steel products, has traditionally been attributed to its principal applications. However, a revolution in cobalt chemicals has resulted from rising demand for portable technologies, as well as demands for greener alternatives to common industrial processes. Growth in the worldwide electric vehicle ( EV ) industry, according to several industry leaders, resulted in a four-fold increase in cobalt demand in 2020, and an eleven-fold increase is expected by 2025. Rising demand from the global EV industry is anticipated to lead to a cobalt supply shortfall in the near future.
EVs and Cobalt Demand Forecast
Increased demand for electric vehicles is predicted to drive an increase in battery use. The rechargeable battery industry has grown to be the largest and fastest-growing cobalt end-use. Lithium-ion batteries have become the most important growth driver for cobalt demand in the electric vehicle market. The development of lower-cost EV battery pack systems, vehicles, and infrastructure, as well as government incentives, has aided market acceptance.
Within 5 to 10 years, EV drivetrains are expected to be competitive with combustion engines at their present rate of advancement. Lithium-ion batteries are increasingly being used in industrial and domestic grid energy storage systems, such as the Tesla Powerwall, due to their charge acceptance, extended shelf life, reliability, and lower total cost of ownership.
Demand for Electric Vehicles
Many governments throughout the world have responded to the effects of climate change by boosting fuel economy regulations and pushing the use of electric vehicles as an alternative to traditional fossil fuel-powered vehicles, and they are continuing to do so. Many countries committed to setting goals to limit and gradually phase out the usage of fossil fuel-powered vehicles in favor of electric vehicles.
Various European Union ( EU ) member states have established aims to ban new sales of gasoline and diesel cars by 2040, and the United Kingdom as well as other states have announced similar goals. India, the world's fourth-largest automobile market, set a similar target of eliminating non-electric vehicle sales by 2030. While cobalt has a variety of applications, the focus of this study is on cobalt used in EV-related applications, as this is a key rising source of demand and has been the main reason behind a recent price spike. These measures have boosted long-term demand for LIBs and their chemical inputs, like as cobalt, and sparked collaborations between automakers, battery makers, and cobalt suppliers.
Electric-Vehicle Competition for Cobalt with Other Industries
Other high-technology businesses that utilize LIBs, such as smartphone and laptop manufacturers, are seeking to secure their own long-term supplies of cobalt as demand from the automobile industry grows. Many companies work to secure cobalt supply for LIBs used in smartphones and other electronic devices and many of them declared their intention to begin sourcing cobalt directly from mining companies rather than through third-party suppliers and metal traders in order to ensure enough material for their own production needs. Other producers of laptops, cell phones, and other electronic products that use LIBs may strive to secure their own cobalt supplies if prices climb or remain at record levels.
What Influences Cobalt Prices
Due to the fact that cobalt is mined as a byproduct of copper and nickel, cobalt pricing has historically followed demand trends for these metals. However, as demand for cobalt utilized in LIBs has grown, prices have diverged.
While there will be various supply adjustments by 2025, demand will be the most important determinant of future cobalt metal price swings. To evaluate the future of this key metal, it will be necessary to monitor if new battery technologies will lower demand or whether the rise in electric vehicles will raise demand for cobalt.
