Will cobalt have its own ‘lithium moment’ in 2022?

Lithium had a spectacular 2021. According to Benchmark Mineral Intelligence, the lithium price index had risen by 240% year-to-date by early December and still rising.

Records continue to be broken.

Med-battery metal cobalt also had a strong second half of 2021 and rose for 100 days in a row to reach more than $ 70,000 / t in December.

Unlike lithium, however, cobalt prices remain well below record levels.

While Fastmarkets predicts prices will fall in 2022, Argus says the best may not have come yet; at least in the US market.

U.S. customers are increasingly demanding fixed-price contracts, Argus says, which happens when they expect steadily rising prices rather than unstable price fluctuations throughout the year.

Why will cobalt continue to run in 2022?

Two things: a US aviation sector in recovery and demand for lithium-ion batteries.

Market participants expect higher cobalt prices due to increased demand from aviation sectors hit hard by the Covid-19 pandemic and related restrictions, Argus said.

“This mood comes as Boeing, one of the largest aircraft manufacturers, plans to increase production of 737 MAX to 31 aircraft / month in early 2022 from its latest rate of 19 aircraft / month by the end of third quarter, “it states. .

“Airlines buying these aircraft are recovering from the economic downturn caused by the Covid-19 pandemic in 2021, a trend that is expected to continue in 2022 and will support aerospace production.”

And an increased future demand for chemicals is expected from US EV battery factories starting in 2022.

“General Motors (GM) plans to open a 30 GWh / year lithium-ion battery plant in Lordstown, Ohio, in the first quarter of 2022, the first of two planned facilities with South Korean battery maker LG Chem,” Argus said.

“SK Battery also plans to open a 9.8 GWh / year plant in Jackson County, Georgia, in 2022, the first of two plants at this location.”

While lithium-ion batteries consume cobalt chemicals such as cobalt hydroxide or sulfate instead of cobalt metal, higher demand for cobalt chemicals may support cobalt metal prices as metal refineries use these chemicals as raw material, Argus says.

“This combination of recurring aviation and aerospace demand and new demand from battery production should support the upward trend of cobalt into 2022.”

READ NOW: Cobalt Stock Guide: Here’s Everything You Need To Know

You may be interested in

Leave a Comment