Cobalt Institute: Cobalt Market Shifts to Shortage

According to a report by Reuters cited by Mining Weekly (MiningWeekly), a study released by the Cobalt Institute (Cobalt Institute) on Wednesday predicted that cobalt demand growth will outpace supply, with the cobalt surplus in 2024 expected to ease and a shortage likely to emerge in the early 2030s. The report was completed by Benchmark Minerals Intelligence (Benchmark Minerals Intelligence).

In the short term, the future of the cobalt market will depend on the actions of the DRC, the world's largest cobalt producer. At the end of February, the country decided to implement a temporary export ban for four months. Cobalt is a critical material for the production of lithium batteries used in EVs.

At the end of February, cobalt prices fell to a nine-year low. To address the market surplus, this Central African country implemented export restrictions. Since then, cobalt prices have risen by 60% to $16/lb.

In addition to the uncertainty caused by the DRC's export ban, global cobalt supply is expected to grow at an average annual rate of 5% in the coming years, with the DRC's share of the global market declining from 76% last year to 65% by 2030, as Indonesia's cobalt production rapidly increases, raising its share from 12% to 22%.

Meanwhile, driven by the development of the EV market, global cobalt demand (excluding government inventories) is expected to grow at an average annual rate of 7%, reaching 400,000 mt by the early 2030s. In 2024, global cobalt consumption is projected to reach 222,000 mt.

By the 2030s, the share of cobalt used in EVs is expected to rise from 43% in 2024 to 57%, as demand growth for smartphones, laptops, superalloys, and other industrial applications slows down.

The report stated that in 2024, the cobalt market will have a surplus of 36,000 mt, accounting for 15% of demand, compared to 25,000 mt in 2023.