Cobalt Prices Down 16.68% Due to Oversupply and EV Trends

Cobalt prices fell to US$24,287.90 by year-end 2024, a 16.68% drop. Oversupply from producers like the DRC, coupled with reduced demand from EVs, pressures the market.

Date: 11-01-2025

AI Rating: 5

Market Dynamics Affecting Cobalt Prices

Cobalt prices opened at US$29,151.50 per metric ton in 2024 but decreased by 16.68% by year-end, influenced by oversupply. The DRC, being the largest producer, fueled this surplus. Demand is declining, especially from the EV sector, shifting towards battery chemistries with lesser cobalt content.

Fundamentals of Supply and Demand

In 2023, mine supply surged by 16.75%, leading to a significant increase from 197,000 metric tons in 2022 to 230,000 metric tons. The DRC contributed 170,000 metric tons of this supply. Thus, there’s significant pressure on cobalt’s market as newer battery technologies challenge cobalt's role.

EV Sector Insights

Despite increased competition, the rise in EV sales remains a bright spot, though Tesla's slight decline in sales could affect market sentiment. Others like General Motors report notable growth in EV deliveries. It’s essential for investors to monitor how these trends will influence cobalt demand.

Governmental and International Developments

Funding and collaborations to enhance the North American cobalt supply chain highlight a positive undertone despite underlying market pressures. Successful initiatives to combat child labor in DRC mining practices also show a shift towards ethical sourcing, which may appeal to socially conscious investors.

Future Demand Indicators

While cobalt use declines in EV batteries, its application in high-performance electronics is steady. Analysts predict demand from the EV industry could surge by 60-70% by 2040, as cobalt's critical role in overcoming current challenges may draw renewed attention. However, ongoing shifts in battery chemistry may elevate risks for companies reliant on cobalt.

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