Battery Material Cobalt Prices Surge 65% Since January Due to 'Chinese Stockpiling'

[Image source= Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] According to the Hong Kong South China Morning Post (SCMP) on the 15th (local time), cobalt prices, used as battery materials for electric vehicles, smartphones, and laptops, have surged about 65% since January due to hoarding in China.

Last week, cobalt was traded at $53,000 per ton (approximately 69 million KRW) at the London Metal Exchange in London, UK, marking the highest price since December 2018.

The State Reserve Bureau (SRB) of China announced last year that it would increase its cobalt reserves, citing rising electric vehicle production in China and Europe. Since then, cobalt prices have been on the rise.

According to market research firm Benchmark Minerals Intelligence, China's battery production in January this year increased by more than 300% compared to the same month last year.

Political instability in the Democratic Republic of Congo (DRC), which accounts for two-thirds of the world's cobalt production, is also a cause of rising cobalt prices. The world's cobalt reserves are estimated at 7 million tons, half of which are believed to be located in the DRC. Given the DRC's crucial role in cobalt supply, political reasons frequently disrupt cobalt supply. Moreover, controversies over child labor exploitation in cobalt mines in the DRC are also contributing factors to supply instability.

The difficulty in transporting goods due to COVID-19 is also fueling the rise in cobalt prices.

China is the world's largest cobalt importer, importing 95,000 tons of cobalt annually. To secure cobalt, China has continued to make substantial investments in the DRC.

China Molybdenum owns the Tenke mine in the DRC, the world's second-largest cobalt mine, and recently acquired the Kisanfu mine from Freeport-McMoRan for $550 million.

This content was produced with the assistance of AI translation services.