The cobalt market was in chaos in the past months, while chaos would undoubtedly come with higher prices. Cobalt price has increased nearly 100 percent in the whole market since October 2016 and will continue to rise to a six-year high. As the main material of lithium-ion batteries, cobalt price rising can absolutely result in mobile phone batteries price booming. The graph below highlights the increase in cobalt price over the past year, especially in late 2016 and early 2017. Let’s find out the reason why cobalt price is increasing.
1. China is the largest battery producer in the world, and it has high demand in cobalt but is short in supply. In short, the problem China is facing now is that cobalt supply cannot keep up with a corresponding demand for batteries in mobiles, electric vehicles and household appliances. That makes it heavily dependent on the Democratic Republic of Congo for cobalt. The supply panic caused by the political crisis of the Republic of Congo makes cobalt production fell, contributing to the rising of price for cobalt. That is one of the reasons.
2.Hybrid electric vehicle batteries demand is also a driver of cobalt prices. China is going to open up the new energy vehicle market. This fast-growing industry will need a huge amount of cobalt to pull off. It is estimated that the number of cobalt used in electric vehicle batteries will increase from less than 2000 tons in 2015 to 17000 tons in 2020. That will also run up the price for cobalt.
3. With consumer electronics coming to the peak season, the strong demand for mobile batteries and electric vehicle batteries has also intensified a higher price of cobalt. As cobalt is scarce and its price is increasing, an imminent spike in demand for cobalt will be challenging in the future. 4. Some suppliers start hoarding global cobalt supplies, which will give rise to another phase of cobalt supply panic. As a key ingredient of lithium-ion batteries, there is no doubt that cobalt price increase would make battery cost become more expensive. Maybe now it is a good timing to build some battery stocks to go through these risks.
Related battery articles:
Apr 23, 2021
REWA is a world leading electronics repair business solutions provider who was founded in 2008 in HongKong. We are committed to delivering one-stop services covering Sourcing Solution, Technical Support Solution as well as Recycle & Resell Solution.