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Cobalt prices have crashed in the past eight months. In question, a drop in demand and Indonesia’s desire to produce more cobalt.
From $40 last May, the pound of cobalt fell to $17 last week. A price slide largely linked to the evolution of the looming market.
In fact, cobalt consumption by electric vehicles increased by 63% in 2022 compared to 2021, according to the latest bulletin from the Cobalt Institute. But this increase linked to the explosion in the number of vehicles put on the market hides another fundamental trend, at the global level: the reduction in the share of cobalt in batteries, in favor of nickel, or even the total disappearance of cobalt. China has thus successfully embarked on the manufacture of batteries based on iron phosphate and de lithium. These so-called LFP batteries already represent 30% of the total market.
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Less and less cobalt in batteries
The evolution of chemistry is drawing a future for the blue metal which was not the one that was still emerging a few years ago. The cobalt market has gone “ from a rapid expansion phase to a contraction phase “Summarizes an expert. And even if European car manufacturers still rely heavily on traditional batteries for performance issues, they are increasingly questioning their dependence on Congolese ore, but also on China, where a large part of the cobalt is processed. raw. Even if Asia and Europe have therefore opted for different development strategies for the moment, the transition at the global level is well and truly underway.
Indonesia, an ambitious producer
The fall in prices is also influenced by the emergence of a new player in the market. According to Bloomberg, Indonesia has become the world’s second largest producer, with more and more plans to extract cobalt from its nickel mines. According to some experts, quoted by the economic agency, the country could produce 20% of the world’s cobalt by 2030 compared to only 1% in 2021.
These prospects, to be taken with caution, alleviate any supply fears, even if they have yet to be confirmed in practice. A supply now largely provided by the Democratic Republic of Congo, the world’s leading source of cobalt, with approximately 70% of production.
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