[ferro-alloys.com]A recent report by Benchmark Mineral Intelligence forecasts that the battery industry will require a further 100,000 tonnes of cobalt by 2025.

The firm’s numbers show that 57% of the world’s cobalt demand will come from the battery sector by the end of the year, a proportion that is expected to increase to 72% in the next five years.

According to the London-based market intelligence publisher, positive sentiment around battery demand for cobalt chemicals is outweighing the bearish sentiment around metal demand from traditional markets in the near term.

Benchmark points out that the EV market’s H2 2020 recovery has been strong, with China having its best quarter in over 12 months and Europe posting surging EV sales numbers, up over 101% Jan-Feb 2020 over the same period a year earlier. This situation, coupled with better than expected demand for portable electronics applications – linked to home working – and mobility products such as eBikes, has seen the sentiment for the outlook for cobalt demand from the battery supply chain improve considerably from where it stood at the start of the pandemic in early 2020.

“As demand from the battery sector grows, it is natural that it becomes the driving force behind prices and sentiment, as the industry is increasingly focussed on the ‘new world’ of cobalt hydroxide, the battery feedstock to chemical supply chain and the forecasted market balance rather than the ‘old world’ – cobalt metal and the industrial supply chain,” the report reads.”

In the analyst’s view, whilst activity in the metal supply chain will always remain important to the cobalt market, and especially cobalt pricing, shifting sands are starting to see a greater emphasis on cobalt hydroxide, and the availability of this feedstock to the battery market.

“The transition to a hydroxide dominated prevailing price becomes more evident when you look at the global supply outlook,” the document states. “With only 25% of refined products annually produced in metal form, the balance has been in favour of chemicals for some years, largely focussed on the battery market. This is even more evident when looking at the supply of intermediate products, with cobalt hydroxide accounting for 70% of unrefined supply in 2020.”

For BMI, the different elements that make up this context, namely, the battery industry crave for cobalt hydroxide, any perceived tightness as the world moves into 2021 and positive demand sentiment, are responsible for supporting cobalt prices in 2020. Indeed, cobalt metal prices (cobalt battery metal, min 99.8%, EXW Europe, USD/lb) have risen 15% from July 2020 to the most recent data published at the end of October 2020.

Benchmark’s cobalt hydroxide prices (100% Co contained basis, CIF Asia), on the other hand, have risen from a low of $21,600/tonne in April 2020, at the peak of concern of falling demand linked to the pandemic, to $27,150/tonne as assessed at the end of October 2020, an increase of 25.7%.

The other side

Not everything is positive when it comes to the outlook for cobalt.

Benchmark makes a point to mention that as automakers move toward reducing the cost of EVs, alongside improvements in the technology, cheaper lithium-iron-phosphate batteries have seen a resurgence in 2020.

“Whilst this LFP growth is primarily linked to EVs in the Chinese domestic market, this is now starting to bleed into the international market with Tesla recently starting to export Chinese made Model 3 vehicles to Europe which contain LFP cells supplied by CATL,” the report reads.

Besides LFP, cobalt is facing challenges from reducing concentrations in cathode technology as the industry continues its march towards high nickel cathodes, primarily NCM 811.

“Whilst the timeline for this is far from certain, as automakers still face difficulties with deploying the technology, it is looking to be an inevitability at this stage, and will see cobalt use on a per kWh basis continue to fall,” BMI predicts.

(Mining.com)

• [Editor:王可]