Has cobalt’s dramatic price plunge come to an end?
Some say cobalt’s horror run is over as prices rebound for the first time in five months.
This time last year, prices were above $US40/lb. Since then, oversupply and sluggish demand has seen a painfully long period of price declines.
And when you thought it couldn’t get any worse, it did.
Roskill says Cobalt Standard Grade prices started 2019 at $US26/lb but fell sharply over the first quarter, bottoming out at $US14/lb in late March.
But we may have seen the worst of it.
The international cobalt benchmark price rebounded for the first time in five months at the end of March, and the momentum continued into April, Roskill says.
“With cobalt prices unable to fall much further, it appears that some restocking is taking place,” says Roskill.
“This should push prices up.
“While the outlook for demand, especially from the battery sector, remains very positive, sentiment remains depressed compared to one year ago.
“Nonetheless, Roskill expects cobalt prices to recover over the course of 2019 and to remain volatile over the coming years.”
#Cobalt price on the move higher again on 4/12/19, at least according to https://t.co/GxMyDeIAEz It’s now at US$16.33/lb. up from a 52-week low of US$13.15//lb. (again, according to Infomine)… That’s up 24%. US$16.33/lb. equals US$36,000/tonne. $FCC.v $FTSSF pic.twitter.com/w9uWVIYSE8
— Peter Epstein, MBA (@peterepstein2) April 15, 2019
But there’s another view — that the uptick in cobalt metal spot buying in the past two to three weeks has been attributed to stockpiling rather than consumption.
This stockpiling is driven by an expectation that the price “will have an apparent and sustainable rebound in two to three years”, cobalt market veteran Tony Southgate said during a panel discussion at Fastmarkets’ Battery Materials Conference in Shanghai.
He reckons this stockpiling activity is just temporary, and that prices could fall back once again.
“Some traders held the opinion that if they can buy below $US15 per lb, in a two-to-three-year time scale, they are pretty much guaranteed to make some money from it,” Mr Southgate said.