Bloomberg: Global cobalt prices being pushed down by Chinese traders
China’s battery industry has seized on a glut in the global cobalt market to push through a change in the way the commodity is priced.
A rapid expansion of cobalt mining in Democratic Republic of Congo and Indonesia has output racing ahead of demand, dragging down global prices. It’s also prompted a push by squeezed Chinese refineries to win changes in how cobalt is bought and sold.
Lithium and nickel also plunged along with cobalt in 2023 as supply expanded, China’s booming EV industry dialed down its breakneck pace of growth. The price slump has wreaked havoc, with new projects stalling, inventories ballooning and investor interest on the wane.
Oversupply is a particular problem for cobalt because it emerges almost entirely as a by-product of making copper or nickel. Indonesia’s booming nickel mines have already transformed the Southeast Asian nation into the world’s second-biggest cobalt producer after DRC. In the African nation, a major new source of cobalt is CMOC’s Kisanfu copper project.
So despite price volatility and a growing surplus, there’s unlikely to be any major mine shutdowns or targeted efforts to rein in cobalt production, according to Rystad Energy’s analyst Susan Zou.
“As long as the price of copper stays at decent levels, there will still be appetite for mining activity,” Zou added. “Gains in copper are still likely to offset some losses in cobalt.”
I didn't know that cobalt was a nickel mining byproduct.