Published on : 24/05/2022 – 00:15
Demand for cobalt is experiencing an unprecedented increase: +22% in one year. A demand driven by the growing needs of electric car manufacturers.
The fate of cobalt is now closely linked to that of the automotive industry. Sales of electric cars skyrocketed globally last year – 6.6 million, or 10% of new car sales, according to the International Energy Agency’s latest annual report on fleet electrification – and for the first time, more cobalt has been integrated into clean vehicles than into the batteries of computers, tablets and mobile phones.
Within 5 years, the needs of the automotive sector should double, according to estimates by the Cobalt Institute. American, European and Chinese manufacturers are increasingly using cobalt-based battery technologies.
Prices up for a year
Faced with exploding demand, cobalt prices have doubled in one year and remain at more than 74,000 dollars per ton. They have contributed to an increase in artisanal production in the Democratic Republic of Congo, a country which largely dominates the market with 74% of production in 2021.
However, logistical tensions have caused prices to fluctuate in recent weeks: first there were difficulties in Durban, the main exit port for Congolese cobalt. The floods in this region of South Africa have led the trader Glencore to delay deliveries, for reasons of force majeure. At the end of the chain, it was the closure of Shanghai that affected demand. Several Chinese automakers have suspended or scaled back operations. Upstream, cobalt refining has also slowed. Disturbances that very quickly have repercussions on prices: half of the electric vehicles produced in the world were produced in China. The country is also the first to refine blue gold.
By 2024/2026, supply will no longer be sufficient
At the current rate of demand, from 2024, the market could be in deficit, according to the Cobalt Institute, which forecasts a demand of 12% per year by 2026 against an increase in production of 8%. Something to worry about car manufacturers. Elon Musk, the boss of Tesla who aims to produce 20 million electric vehicles by the end of the decade, has not ruled out in recent days buying a mine if it were to be, in his words. ” the only way to ensure supplies ».