Cobalt price bulls' worst fears may just have been confirmed
Comment of the Day

January 05 2018

Commentary by Eoin Treacy

Cobalt price bulls' worst fears may just have been confirmed

This article by Frik Els for may be of interest to subscribers. Here is a section:

“Because there is only one lithium ion per one cobalt, that limits of how much charge can be stored. What’s worse is that current batteries in your cell phone or laptop typically only use half of the lithium in the cathode.”

The [Northwestern] fully rechargeable battery starts with four lithium ions, instead of one. The current reaction can reversibly exploit one of these lithium ions, significantly increasing the capacity beyond today’s batteries. But the potential to cycle all four back and forth by using both iron and oxygen to drive the reaction is tantalizing.

“Four lithium ions for each metal — that would change everything,” Wolverton said. “That means that your phone could last eight times longer or your car could drive eight times farther. If battery-powered cars can compete with or exceed gasoline-powered cars in terms of range and cost, that will change the world.”

Eoin Treacy's view

Cobalt is both expensive and rare so it is not the best candidate for use in mass market applications; particularly where there is significant room to scale such as in electric vehicles. Therefore, a race is underway to get an alternative chemistry up and running which can replace cobalt. Lithium iron oxide is one of a number of candidates vying for attention so are solid state batteries and zinc oxide batteries.

It could take years before discoveries in the lab make their way into the global supply chain but the fact that the prize for success is so large may shorten the commercialization route somewhat. In the meantime, cobalt is in supply inelasticity meets rising demand bull market with the price pausing in the region of the $75000 for the last few weeks. A rather wide overextension relative to the trend mean is evident but a sustained move below it would be required to question medium-term scope for additional upside.

Canadian listed Katanga Mining, which is part owned by Glencore, has surged higher in the first few days of the year and a clear downward dynamic would be required to check momentum. 

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