{"id":13840,"date":"2025-01-11T02:53:01","date_gmt":"2025-01-11T02:53:01","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2025\/01\/11\/cobalt-market-2024-year-end-review\/"},"modified":"2025-01-11T02:53:01","modified_gmt":"2025-01-11T02:53:01","slug":"cobalt-market-2024-year-end-review","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2025\/01\/11\/cobalt-market-2024-year-end-review\/","title":{"rendered":"Cobalt Market 2024 Year-End Review"},"content":{"rendered":"<\/p>\n

Cobalt prices started 2024 trading at the US$29,151.50 per metric ton level, the highest price point the battery metal achieved in 2024. By the end of the year prices had contracted by 16.68 percent to US$24,287.90. <\/strong><\/p>\n

Prices remained under pressure due to oversupply, with the Democratic Republic of Congo (DRC) maintaining its dominant position as the world\u2019s largest producer.<\/p>\n

Meanwhile, efforts to diversify supply chains and reduce reliance on the DRC gained momentum, with new projects and funding infusions announced throughout the year in Canada, and the US.<\/p>\n

On the demand side, the rise of battery chemistries utilizing less cobalt, particularly in electric vehicles (EVs), weighed heavily on consumption. Lithium-iron-phosphate (LFP) batteries continued gaining market share globally, further pressuring cobalt\u2019s role in the EV sector.<\/p>\n

However, cobalt\u2019s use in high-performance batteries for smartphones and other electronics remained resilient, offering a counterbalance to declines elsewhere.<\/p>\n

Geopolitics and policy added another layer of complexity, with China expanding its influence in African mining regions and Western nations pursuing stricter supply chain transparency laws.<\/p>\n

These dynamics are expected to shape cobalt\u2019s role in the critical metals market into 2025 and beyond, as stakeholders grapple with the metal\u2019s evolving importance in a decarbonized economy.<\/p>\n

\n

2024 cobalt supply and demand trends <\/h3>\n

Residual oversupply from 2023 prevented any price positivity in the cobalt market through 2024.<\/p>\n

According to the US Geological Survey\u2019s annual commodity report, mine supply of the battery metal ballooned in 2023, growing 16.75 percent year-over-year, from 197,000 metric tons in 2022 to 230,000 metric tons in 2023.<\/p>\n

Over the last three years annual mined supply has soared, from 142,000 metric tons to 230,000 metric tons, a 61 percent increase.<\/p>\n

170,000 metric tons of 2023\u2019s total was mined in the DRC; the African nation is home to the five largest cobalt mines in the world. These high-grade areas have attracted the attention of Chinese mining companies, particularly China Molybdenum (SHA:603993,OTC Pink:CMCLF), which is one of the largest cobalt producers in the DRC and the world.<\/p>\n

In recent years cobalt mining practices in the DRC have come under fire by international rights groups concerned that artisanal and small-scale cobalt mining operations are using child labour.<\/p>\n

In October 2024 the US Department of International Labour concluded a six year program entitled Combatting Child Labor in the Democratic Republic of the Congo\u2019s Cobalt Industry (COTECCO).<\/p>\n

Key achievements include supporting the creation of an Interministerial Commission to monitor child labor and a provincial commission in Lualaba.<\/p>\n

Since its inception in 2018, the project has trained 458 stakeholders from government, civil society, and private sectors on combating child labor and introduced tools like ILAB\u2019s Comply Chain to 28 mining entities in Lualaba and Haut-Katanga.<\/p>\n

Additionally, COTECCO collaborated with the DRC government to establish a Child Labor Monitoring and Remediation System (CLRMS), training 110 officials to operate it. By March 2024, the CLRMS database registered 5,346 children and was officially handed over to the Ministry of Mines for sustained management.<\/p>\n<\/div>\n

\n

Cobalt fundamentals tightly tied to EV growth <\/h3>\n

Combatting child exploitation in the cobalt supply chain will be paramount as demand from the electric vehicle sector alone is expected to increase by 60 to 70 percent by 2040.<\/p>\n

The DRC is projected to play a vital role in supplying the majority of the 214,000 metric tons of cobalt demand expected by 2030.<\/p>\n

\u201cIt\u2019s hard to understate just how much demand will be added to the cobalt market by the EV industry,\u201d said Roman Aubry, Benchmark Mineral Intelligence Pricing Analyst in an April email. \u201cAlready it has become the largest demand sector, and its dominance is only set to grow.\u201d<\/p>\n

In 2024, global electric vehicle (EV) sales reached a third consecutive record high, with China leading the surge. The China Association of Automobile Manufacturers reported a 5.3 percent increase in passenger vehicle sales, totaling 23.1 million units, with EVs and hybrids accounting for 47.2 percent of the market\u2014a 40.7 percent rise from the previous year.<\/p>\n

Tesla (<\/strong>NASDAQ:<\/strong>TSLA)<\/strong>, a dominant player in the EV sector, experienced a 1.1 percent decline in worldwide sales, delivering 1.79 million vehicles compared to 1.81 million in 2023.<\/p>\n

This downturn was attributed to increased competition and market saturation. However, other automakers reported significant growth. General Motors (TSX:LAC,NYSE:LAC), for instance, achieved a 50 percent increase in Q4 EV sales, driven by models like the Chevrolet Equinox EV SUV.<\/p>\n

Analysts suggest that while Tesla\u2019s sales dip impacted overall market perceptions, the broader EV market remained robust, with traditional manufacturers gaining traction.<\/p>\n

Other notable developments in the EV sector through 2024 was the April announcement from Honda (<\/strong>NYSE:<\/strong>HMC) <\/strong>that it would invest C$15 billion to build a comprehensive<\/strong>EV value chain in Ontario, Canada.<\/p>\n

The plans include an EV assembly plant and a standalone battery manufacturing facility. Joint ventures will add a cathode active material processing plant and a separator plant.<\/p>\n

The assembly plant aims to produce 240,000 vehicles annually, while the battery facility will have a 36 gigawatt hour capacity.<\/p>\n<\/div>\n

\n

Government funding supports sector growth <\/h3>\n

Due to its critical mineral designation the cobalt sector has also been the recipient of government funding.<\/p>\n

In May, the US and Canada partnered for a co-investment to enhance the North American critical minerals supply chain. The collaboration will benefit Fortune Minerals (TSX:FT,OTCQB:FTMDF) and Lomiko Metals (TSXV:LMR,OTCQB:LMRMF), with the latter set to receive up to C$7.5 million from the Canadian government, matched by an additional US$6.4 million from the US Department of Defense\u2019s Defense Production Act Investments Office.<\/p>\n

The funding is part of the Canada-US Energy Transformation Task Force.<\/p>\n

\u201cCanada is positioning itself as a global leader in the supply of responsibly sourced critical minerals for the green and digital economy,\u201d said Jonathan Wilkinson, Canada\u2019s minister of energy and natural resources.<\/p>\n

\u201cThrough our work with the United States and other allies, we are developing secure critical minerals value chains that will power a prosperous and sustainable future,\u2019 he added.<\/p>\n

In August Electra Battery Materials (TSXV:ELBM,NASDAQ:ELBM)<\/strong>secured<\/strong>a US$20 million grant from the US Department of Defense to aid in the construction and commissioning of \u201cNorth America\u2019s only cobalt sulfate refinery,\u201d located in Ontario.<\/p>\n

\u201cElectra is committed to strengthening the resiliency of the North American battery supply chain,\u201d said Electra CEO, Trent Mell. \u201cWe are grateful to the US Department of Defense for its support. On issues of national security, there are no borders between Canada and the United States. We are proud to partner with the US Government to build a strong North American supply chain for critical minerals.\u201d<\/p>\n<\/div>\n

\n

Factors to watch for cobalt in 2025 <\/h3>\n

Despite having several positive catalysts on the horizon, the cobalt market is facing immense pressure from substitution.<\/p>\n

The shift toward LFP batteries, which omit cobalt, has drastically reduced demand for the metal in EV battery production. By Q3 2024, LFP batteries dominated 75.2 percent of the market, while nickel-manganese-cobalt (NMC) batteries fell to 24.6 percent, according to S&P Global.<\/p>\n

The declining role of cobalt in EV batteries was further highlighted in a correspondence between China\u2019s CMOC (OTC Pink:CMCLF,SHA:603993), the world\u2019s largest cobalt-mining company and Bloomberg in late 2024.<\/p>\n

\u201cWe predict that EV batteries will never return to the era that relies on cobalt,\u201d said Zhou Xing, a spokesperson for CMOC. \u201cCobalt is far less important than imagined.\u201d<\/p>\n

As coblt\u2019s future in the EV space begins to be clouded with uncertainty, demand persists in consumer electronics segment, which rely on lithium-cobalt-oxide batteries, and in superalloys for aerospace and military applications.<\/p>\n<\/div>\n

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.<\/strong><\/p>\n<\/p>\n

This post appeared first on investingnews.com<\/div>\n","protected":false},"excerpt":{"rendered":"

Cobalt prices started 2024 trading at the US$29,151.50 per metric ton level, the highest price point the battery metal achieved in 2024. By the end of the year prices had contracted by 16.68 percent to US$24,287.90. Prices remained under pressure due to oversupply, with the Democratic Republic of Congo (DRC) maintaining its dominant position as […]<\/p>\n","protected":false},"author":0,"featured_media":13841,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-13840","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=13840"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/13840\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/13841"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=13840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=13840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=13840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}