Most lithium-ion batteries contain the metal cobalt in their cathodes, which increases their energy density and stability. The steep rise in demand for these batteries previously led to soaring cobalt prices. However, Yahoo Movies reports this scarce metal is now in over-supply, due to new mines opening. And as a result cobalt prices for lithium-ion batteries have fallen sharply, the news channel adds.
How Far Have Cobalt Prices Fallen Recently?
Cobalt was previously a by-product of copper production used as drying agent for paints, varnishes, and inks. However, demand has increased rapidly as lithium-ion batteries flooded the market. Fast Markets reported the lowest cobalt prices since August 2016, on May 8, 2024.
However, since then Reuters advises that China has significantly increased its cobalt purchases from Democratic Republic of Congo (DRC). Meanwhile, Western electric car sales lag below predicted rates, as demand continues to soften. Yahoo News reports a similar trend in mobile phones and laptop sales, which often have lithium-ion batteries containing cobalt.
Other Trends Affecting the Price of Cobalt
The lower price of cobalt is good news for the lithium-ion battery industry. That’s because it makes these batteries more affordable when compared to sodium-ion, and other solid-state alternatives. However, this competitive edge could evaporate by 2027, according to Reuters, when electric car sales might accelerate again. But there is another factor we should consider in the mix:
- Lithium-ion batteries have almost maxed out on their energy density potential.
- Their chemistry also may become unstable, with a growing number of incidents reported.
- Fresh challenges are emerging from other chemistries, especially solid sodium-ion.
The scales could tilt the other way if cobalt prices for lithium-ion batteries return to their earlier high levels. We don’t have a crystal ball, and so we’ll leave the debate there for another day.
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