Technology and battery metals
4. Market Outlook on Cobalt
If we move a few years forward from the initial boom of the EV industry in 2016;,the advancements of this technology is much more familiar, allowing us to understand what direction the industry is heading. It is clear that most auto-manufacturers are looking to release (or have already released) new auto-models with in inclusion of an EV choice, partially due to governments pushing and incentivizing car makers with tax benefits and grants. Despite EVs being usually more expensive to purchase and maintain, consumers have increased their purchases, as over 2 million EVs were sold in 2018, up from just a few thousand in 2010. Bloomberg expects this figure (EVs sold) to rise to 10 million in 2025, 28 million in 2030 and 56million by 2040, accounting for 57% of all passenger vehicle sales and over 30% of the global passenger vehicle fleet. The demand for cobalt is therefore expected to increase steadily in line with the demand for EVs. A report by UBS predicts the global market for EV batteries to grow tenfold by 2025. On the other hand, as 60% of world supply comes from the DRC, poor transport networks, domestic politics disputes and changing fiscal policies mean that cobalt supply will always be uncertain. In August 2019, the mining giant, Glencore, announced that it will be temporarily closing the world’s largest cobalt mine in DRC, accounting for 20% of all cobalt production, in an attempt to revive cobalt prices. This move is likely to result in the initial 11,000 MT surplus of cobalt in 2019 turning into a deficit, scaring EV producers to stock up on cobalt, which can result in prices being brought back up faster and higher than initially expected. Considering the constant growth in cobalt demand along with restricted supply, the market is predicting that cobalt will go into a permanent deficit in 2021 and beyond if EV growth rates occur as most forecasters assume.
However, technological advancements have always run faster than we could predict. While battery producers are focusing on improving the capacity, durability and efficiency of lithium-ion batteries, scientists are now searching for alternate battery types, using silicon to achieve three times the performance of current graphite lithium-ion batteries. Other than silicon, scientists in Japan are working towards using sodium to replace lithium. Commercialization of these batteries is expected to begin within the next five to ten years. Apart from that, in pursuit of even more environmentally friendly alternatives to petroleum-based fuel, scientists are also working on the implementation of hydrogen fuel tanks into automobiles, which can reduce the reliance of batteries in the future auto- market.
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