News Feed Item

Cobalt Market May See More Changes in 2014

LONDON, February 12, 2014 /PRNewswire/ --

With 2013 behind us, the cobalt market will reflect on a year that saw minimal price movement despite a number of significant developments.  New production capacity coming on stream in the Madagascar and the Philippines, Freeport Cobalt's acquisition of the Kokkola refinery, and a proposed ban on concentrate exports from the DRC and subsequent increase in export taxes did little to profoundly impact market prices which, despite modest increases over the summer months, ended the year at a similar level to which they started it.

What will 2014 and beyond hold?  

What should we expect to happen in the DRC in 2014?

Given its position as the world's largest mine producer, developments in the DRC have the potential to significantly impact the market in 2014. The DRC government is known to want to increase domestic refining of copper and cobalt products and decrease exports of unrefined materials. The proposed export ban on concentrates did not come to fruition in 2013, but government rhetoric suggests that such measures could still go ahead in 2015.

Whilst a blanket ban remains unlikely, the 2013 increase in export tax, from US$60/t to US$100/t, could be the first in a number of changes.  Gécamines, the state-owned producer,  is in the process of conducting a review of its partnerships to determine whether its interests are being preserved.  This review, together with the expected introduction of a new mining code which could see an increase in royalty and tax rates, could have profound implications for foreign companies operating in the country.

Reports that ENRC may be forced to sell its DRC assets might also have the potential to change the complexion of the DRC production landscape. If the reports are accurate, will an existing producer, or a new player, acquire ENRC's assets?

What else lies in store, and where will new supply come from?

There are a number of potential mine projects that could produce additional cobalt raw materials over the next few years.  However, the vast majority are at a very early stage of exploration or development and it is likely that very few new operations will come on-stream before 2018.  Additional cobalt mine supply is most likely to come from expansion projects at existing producers such as those underway at Tenke Fungurume Mining in the DRC and African Rainbow Minerals in South Africa, and those being considered at Mirabela Nickel in Brazil, Moa Bay in Cuba, and Meta Nikel Cobalt in Turkey.  

Another potential source of cobalt is from the numerous nickel producing operations that extract cobalt materials but do not recover them, such as those operations in the Philippines and New Caledonia which produce nickel materials for nickel pig iron (NPI) production in China.  Similarly, Altona Mining in Finland produces a low-grade cobalt-nickel concentrate, which is currently stored, pending a treatment solution.  These operations might look to produce cobalt if it was economical to do so. 

Which sectors and regions will drive growth in demand?

Global consumption of cobalt has increased at a CAGR of 5.5% between 2008 and 2013.  Roskill expects future demand to grow at a similar rate, expected to be 6.1%py to 2018.  As a result, cobalt demand will reach over 110,000t.

Growth in demand for cobalt will be led by Asia, particularly China, South Korea and Japan.  Growth in demand in these countries will be driven by increasing battery cathode production.  Demand for cobalt in battery applications is forecast to grow at 9.2%py to 2018 and will continue to be the greatest contributor to increased demand.  Demand for cobalt in catalysts is also expected to grow at a high rate (8.3%py), underpinned by high growth in demand for PET and in the oil and gas sector.

What changes to prices may be expected, if any?

Roskill expects the cobalt market to remain in a state of oversupply until 2016 when supply and demand are expected to be broadly in balance.  However, it will take several years for the recent period of oversupply and resultant stockpiling to be reconciled, which is likely to keep prices in check over the medium term.    

Roskill expects prices to continue on a slight downward trend in 2014 with the ramping up of new projects in Madagascar and the Philippines brining additional material into the market and compounding the current oversupply situation.  Thereafter, Roskill expects a modest year-on-year increase in prices with high grade cobalt real prices increasing at roughly 3.6%py to 2018.  

Will we see more of a shift to LME pricing?

The LME's introduction of cobalt and molybdenum futures contracts in 2010 brought about an alternative to trade journal sourced pricing and introduced the option of regulated exchange pricing information.  Uptake in switching to this new platform has been slow. However, in 2013 it was announced that Freeport-McMoRan Copper & Gold would use LME pricing data for some US$200 million worth of annual cobalt sales.  Freeport said it will turn to LME-based pricing for cobalt and cobalt hydroxide supply contracts from January 2014.  

It is unclear if other producers, traders or end users will choose to adopt LME-based pricing and it is commonly held that the trading volume will need to increase before more producers switch to LME pricing.   It was reported in the Financial Times that ENRC planned to introduce an element of LME pricing into its contracts from 2014 when it will be selling its cobalt using a weighted average of the LME and Metal Bulletin prices.  It is likely that if major producers such as Freeport and ENRC switch to LME pricing, then other smaller producers may follow suit.

Roskill's new Cobalt: Market Outlook to 2018 contains full estimates for 2013, profiles on major producers and projects, an assessment of key market trends, an overview of developments in the DRC, and an outlook for supply, demand and prices to 2018. This latest edition is available, until the 28th February, at an introductory price of £4680 / US$7470 / €5580 from Roskill Information Services Ltd, 54 Russell Road, London SW19 1QL ENGLAND. Tel: +44-20-8417-0087, Email: [email protected]   Web: http://www.roskill.co.uk/cobalt.

Note to editors

Roskill Information Services Ltd. of London, UK is a leading provider of multi-client and bespoke market research services to the minerals and metals industry.

The new Cobalt report contains 327 pages, 156 tables and 121 figures plus an appendix of international trade statistics.  It provides a detailed review of the industry, with subsections on the activities of the leading producing companies. It also analyses consumption, trade and prices.

For further information on this report, please contact Robert Baylis, [email protected] or +44-20-8417-0087.


SOURCE Roskill Information Services

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Between the mockups and specs produced by analysts, and resulting applications built by developers, there exists a gulf where projects fail, costs spiral, and applications disappoint. Methodologies like Agile attempt to address this with intensified communication, with partial success but many limitations. In his session at @DevOpsSummit at 19th Cloud Expo, Charles Kendrick, CTO at Isomorphic Software, will present a revolutionary model enabled by new technologies. Learn how business and deve...
Enterprises have been using both Big Data and virtualization for years. Until recently, however, most enterprises have not combined the two. Big Data's demands for higher levels of performance, the ability to control quality-of-service (QoS), and the ability to adhere to SLAs have kept it on bare metal, apart from the modern data center cloud. With recent technology innovations, we've seen the advantages of bare metal erode to such a degree that the enhanced flexibility and reduced costs that cl...
SYS-CON Events announced today that Niagara Networks will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Niagara Networks offers the highest port-density systems, and the most complete Next-Generation Network Visibility systems including Network Packet Brokers, Bypass Switches, and Network TAPs.
In his session at Cloud Expo, Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, will provide economic scenarios that describe how the rapid adoption of software-defined everything including cloud services, SDDC and open networking will change GDP, industry growth, productivity and jobs. This session will also include a drill down for several industries such as finance, social media, cloud service providers and pharmaceuticals.
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Intelligent machines are here. Robots, self-driving cars, drones, bots and many IoT devices are becoming smarter with Machine Learning. In her session at @ThingsExpo, Sudha Jamthe, CEO of IoTDisruptions.com, will discuss the next wave of business disruption at the junction of IoT and AI, impacting many industries and set to change our lives, work and world as we know it.
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue an...
Established in 1998, Calsoft is a leading software product engineering Services Company specializing in Storage, Networking, Virtualization and Cloud business verticals. Calsoft provides End-to-End Product Development, Quality Assurance Sustenance, Solution Engineering and Professional Services expertise to assist customers in achieving their product development and business goals. The company's deep domain knowledge of Storage, Virtualization, Networking and Cloud verticals helps in delivering ...
In the 21st century, security on the Internet has become one of the most important issues. We hear more and more about cyber-attacks on the websites of large corporations, banks and even small businesses. When online we’re concerned not only for our own safety but also our privacy. We have to know that hackers usually start their preparation by investigating the private information of admins – the habits, interests, visited websites and so on. On the other hand, our own security is in danger bec...
The Internet of Things (IoT), in all its myriad manifestations, has great potential. Much of that potential comes from the evolving data management and analytic (DMA) technologies and processes that allow us to gain insight from all of the IoT data that can be generated and gathered. This potential may never be met as those data sets are tied to specific industry verticals and single markets, with no clear way to use IoT data and sensor analytics to fulfill the hype being given the IoT today.
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
OnProcess Technology has announced it will be a featured speaker at @ThingsExpo, taking place November 1 - 3, 2016, in Santa Clara, California. Dan Gettens, OnProcess’ Chief Analytics Officer, will discuss how Internet of Things (IoT) data can be leveraged to predict product failures, improve uptime and slash costly inventory stock. @ThingsExpo is an annual gathering of IoT and cloud developers, practitioners and thought-leaders who exchange ideas and insights on topics ranging from Big Data in...
As companies adopt the cloud-to-streamline workflow, deployment hasn’t been very seamless because of IT concerns surrounding security risks. The cloud offers many benefits, but protecting and securing information can be tricky across multiple cloud providers and remains IT’s overall responsibility. In his session at 19th Cloud Expo, Simon Bain, CEO of SearchYourCloud, will address security compliance issues associated with cloud applications and how document-level encryption is critical for sup...