Cobalt: Dramatic price fall comes to an end

Cobalt Standard Grade prices started the year at US$26/lb but fell sharply over Q1, bottoming out at US$14/lb in late March. Q1 prices averaged US$18.50/lb.

Roskill view:

This time last year, cobalt prices were above US$40/lb. Since then, oversupply (especially of hydroxide but also of most refined forms), set against sluggish demand (and limited investor stockpiling), brought about a 12-month period of price decline. The rate of that decline intensified in 2019 and, with prices dropping week-on-week, buyers remained on the sidelines. Significant amounts of cobalt were not committed to long-term contracts last year and many buyers, including those in China, are intending to purchase cobalt on a spot basis. The number of, and size of, spot deals has increased sharply. The cobalt market continues to change quickly.

With cobalt prices unable to fall much further, it appears that some restocking is taking place. This should push prices up. While the outlook for demand, especially from the battery sector, remains very positive, sentiment remains depressed compared to one year ago. Nonetheless, Roskill expects cobalt prices to recover over the course of 2019 and to remain volatile over the coming years.

Recent developments in the cobalt market include the introduction of the London Metal Exchange’s new cash-settled cobalt contract, which is settled against Fastmarkets’ benchmark standard-grade cobalt price.

Roskill’s NEW Cobalt: Outlook to 2028 report will be published in July 2019. Click here to download the brochure or sample pages or access further information.

To discuss the cobalt market with Roskill, contact Jack Bedder: jack@roskill.com