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Demand for Cobalt is Skyrocketing (And So Are Prices)

We're running out of cobalt...

Posted April 25, 2017 at 4:20PM

I’m sure you’ve heard of lithium-ion batteries before.

They power our electric cars, phones, and laptops.

Essentially, our modern world couldn’t survive without them.  

Lithium is important.

But there’s actually something that makes up 35% of these batteries that you might not know about…

Cobalt. Without it, these batteries wouldn’t work.

Unfortunately, we’re running out of it. Cobalt is a by-product of nickel and copper mining, so we can’t mine for it directly.

This is unfortunate because cobalt is desperately needed. According to techcrunch.com, 42% of the world’s cobalt supply is used in the battery industry.

And that industry is just getting bigger.

Car companies around the world are ramping up their electric car production. Tesla has been in the electric game for years, and with their successes, other companies are jumping in feet first. Volkswagen is coming out with 4 electric cars in the next few years, and they plan to rival Tesla with their affordability --Perhaps even beat Tesla, since the low-end Model S sedan costs upwards of $68,000.

TSLA S

The problem?

All these cars need cobalt to run.

Reuters estimates that by 2020, 75% of lithium batteries will contain cobalt.

According to oilprice.com, “Supply [of cobalt] is fantastically tight and set to get phenomenally tighter. Analysts at Macquarie Research projects deficits of 885 tonnes of this resource next year, 3,205 in 2019 and 5,340 in 2020. That’s a deficit increase of 503 percent.”

The deficit is only going to grow as demand for electric cars continues, which means prices are going to skyrocket even more than they already have.

This time last year cobalt was $10.34/lb.

Now? It’s almost $26/lb.

And those prices are going to keep jumping.

The cobalt market is rife for investors who want to get in as prices rise and supplies plummet. 

 

 

 

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