Cobalt Hoarding Ahead of Assumed Electric Car Boom
February 25th, 2017Via: Reuters:
Investors are buying up physical cobalt anticipating that shortages of the metal, a key component of lithium-ion batteries used in electrical cars, will spur prices to their highest levels since the 2008 financial crisis.
Prices for cobalt metal have climbed nearly 50 per cent since September to five-year peaks around US$19 ($NZ26.50) a pound (0.45 kilograms) as stricter emissions controls boost demand for electric vehicles, especially in China, struggling with ruinous pollution levels in some cities.
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Some 98 per cent of cobalt is produced as a by-product of copper and nickel output, so for investors pure equity exposure to cobalt is tricky.
“Cobalt isn’t going to massively impact share prices. The funds looked at LME (London Metal Exchange) cobalt contracts, but they aren’t liquid enough for the millions they want to invest,” a Europe-based cobalt trader said.
“So they are buying cobalt with the intention of sitting on it until prices rise, looking for $25 (a lb) or more.”
