Cobalt suppliers report “a decent amount of forward buying for 2020.”
The 30% correction in cobalt metal prices in August from $12 per lb to $16 per lb had more to do with cobalt prices dropping unrealistically low than to Glencore’s decision to shut the Mutanda copper/cobalt mine in the Democratic Republic of Congo at yearend, sources said. This is borne out by prompt metal prices holding steady today at around $17.50 per lb.
Some large volume sales for 2020 have been booked at about $18.50 per lb, sources report.
Many cobalt sellers are anticipating that prices will rise further, possibly above $20 per lb between now and November. The reason: A major supplier will be working on 2020 hydroxide contracts in October and has a vested interest in pushing metal prices higher in advance of the negotiations.
One trader is betting on cobalt prices reaching $18-20 per lb this year and then rising to $20-25 in 2020. “Certainly $17.50 is underpinned right now,” he said.
Predictions of cobalt prices in the $20s look optimistic to buyers who point out that the cobalt surplus is expected to last well past 2020.
Cobalt bulls continue to point to electric vehicles. They believe that by 2023-2024, EV demand in Europe will create a huge increase in demand for cobalt in EV batteries.