RE: 🎙InvestorIntel Panel Speaks on “The Cobalt Bull Market”Excellent article Julian. Thanks!
I tend to bypass these video's because they are so dang long. Here is my summary:
- The increase to $50/lb Cobalt and the crash thereafter was probably actually caused because of a supply driven crisis in Congo (I thought it was the 2008 Recession that caused demand to decrease). The high price caused a flurry of Cobalt mining, so when the Civil ware ended, there was a surplus.
- It was stated that if the Cobalt demand were normalized to 1 year, we are at week three. Bottom line, we are very early in the demand driven rally.
- If the Congo has issues, prices were estimated to hit $100/lb. This is not seen as good btw, and everyone wanted to avoid it. This would increase the efforts away from Cobalt.
- If Cobalt goes from $25/lb to $50/lb, this will increase the price of a car by [only] $1000. A women made an excellent point... rare earths had a bubble which caused massive investment into finding alternatives; and why won't this happen to Cobalt. Basically, you can't raise the cost of a car by $1000 after just putting the car out. Answer: 1. the price of batteries are naturally coming down actually, and power per lb is increasing. So some of these costs can be defrayed. However, more importantly, there is no alternative in the near term to Cobalt. It will take a 5-10 years from now to create a viable aternative.
- Having said that... TESLA however has indicated it knows where it is getting all of this critical metals, to include Cobalt; and, it will be in North America. This is an issue. Everyone was dubious because there is not enough North Amercian Cobalt available to do this. Curious... have they found a new chemistry?
-If (as everyone thinks) the Teslas 3 series will produce 1/2 Million cars in the short term (1 to 2 years), that will equal the entire demand for North America.
- The LME represents only about 30% of the entire Co market. As such, they can be manipulated by "hoarders", which raised the price to $25/lb. So the question is, what is the "real" price. Having said that, when they sell, no expects a plunge, because the Chinese will quickly buy up the demand every expects. The price of $25/lb seems reasonable for now, even with the hoarding. And folks seem to think the price will go up to ~$50 probably (or $100/lb if we have a crisis in the Congo).
- Big push for recycling of Cobalt. Two types: 1) batteries, 2) tailings from old mines. Previously, the mining industry would simply dump all there tailings. so this is an opportunity perhaps. Having said that, everyone was a bit dubious about the maximum affect recycling can have.
-Presently, "recycled batteries" use only 2% of recycled parts. It is not economical now. So there is lots of talk about recycling. However, it may not be very cost effective, and it needs an infrastruture (e.g. in the US 320 Million people kinda gotta be onboard, or those batteries don't get recyled).