A delayed response can contribute to volatility in the market clearing price for a commodity. Responding to ChangesĪs for any commodity that is dug out of the ground, producers do not always have the spare capacity to instantly respond to changes in demand. In 2019, Mutanda produced 25,000 metric tons (MT) of cobalt, making it the world’s largest cobalt mine. Glencore, the world’s biggest cobalt producer, recently announced that its mothballed Mutanda mine in the Democratic Republic of Congo (DRC) will be put back into production by the end of 2021. Cobalt recycling is a growing market and accounted for approximately 10,000 MT production volumes in 2020. The DRCaccounts for 2/3 of global cobalt mining output. With electric vehicle sales forecast to increase by 30% annually out to 2025, the battery sector will only become more relevant for overall cobalt demand.ĭespite widespread lockdowns due to the pandemic, cobalt mining production was relatively stable year-on-year, dropping 6% versus 2019, to 145,000 MT. Overall, global cobalt consumption fell back marginally in 2020 (-0.6% versus 2019) 1. Since 2013, demand from the battery sector has been rising at an annual rate of 10%, while the overall cobalt market grew by only 5% per year. Batteries now account for 57% of total cobalt demand. That’s big news for cobalt, one of the key metals included in battery production. Sectors such as aerospace and manufacturing were negatively impacted by COVID-19, but the battery sector continued to grow. Cobalt futures have seen wide adoption since launching in December 2020, with about $100 million open interest notional value at the start of July.With electric vehicle sales forecast to increase by 30% annually, the battery sector will become increasingly important for cobalt demand.
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