2024-01-08 01:27:00
+170% cobalt produced in 2023 for the Chinese CMOC. According to Bloomberg agency estimates, the mining group becomes number 1 ahead of the giant Glencore. A glut of cobalt on the market which pushes prices down a little further.
Glencore number 1 in cobalt, this was true until the announcements from the Chinese CMOC (China Molybdenum) at the end of last week: the group produced more than 55,000 tonnes of cobalt in 2023, or 174% more than the year former. This volume places the Chinese group ahead of the Swiss raw materials giant, according to calculations by the Bloomberg news agency, Glencore having not yet published its results for 2023.
This boom in production can be explained firstly by the entry into operation of the new copper and cobalt mine at Kisanfu, in the Democratic Republic of Congo. The quantities produced there exceeded the group’s forecasts by 20%.
Price drop of 30%
This bonus is added to the reserves accumulated at another mine, that of Tenke Fungurume (TFM): the ore which was extracted there was in fact held back for several months because export was prohibited due toa dispute between the two Chinese and Congolese partners. Since last summer, the stock, estimated at 13,000 tonnes, has been gradually put back on the market and is contributing to the increase in circulating supply.
To this must be added the increase in Indonesian production, now number two in the sector. This abundance of cobalt has caused prices to fall: over the year 2023, they have fallen by a third, and by more than 60% since their last peak in April 2022. A fall which has also led some analysts to say that cobalt is one of the worst markets they have ever seen: “ I have not experienced any similar cases of oversupply », confided a consultant from the Australian bank Macquarie, a few months ago to Financial Times.
Surplus market until 2027
What accentuated the imbalance was that demand was unable to absorb the production surplus, since it increased less than expected, due to the slowdown in sales of electric vehicles on the Chinese market. Cobalt was not the only one to suffer, the other energy transition metals, nickel and lithium, also saw their prices fall.
To see the trend reverse, we will have to be patient. The Cobalt Institute announces several more years of surplus. According to the organization, we will have to wait until 2027 to see demand exceed supply again.
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