Welcome!

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
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
Developing software for the Internet of Things (IoT) comes with its own set of challenges. Security, privacy, and unified standards are a few key issues. In addition, each IoT product is comprised of (at least) three separate application components: the software embedded in the device, the back-end service, and the mobile application for the end user’s controls. Each component is developed by a different team, using different technologies and practices, and deployed to a different stack/target –...
One of biggest questions about Big Data is “How do we harness all that information for business use quickly and effectively?” Geographic Information Systems (GIS) or spatial technology is about more than making maps, but adding critical context and meaning to data of all types, coming from all different channels – even sensors. In his session at @ThingsExpo, William (Bill) Meehan, director of utility solutions for Esri, will take a closer look at the current state of spatial technology and ar...
According to Forrester Research, every business will become either a digital predator or digital prey by 2020. To avoid demise, organizations must rapidly create new sources of value in their end-to-end customer experiences. True digital predators also must break down information and process silos and extend digital transformation initiatives to empower employees with the digital resources needed to win, serve, and retain customers.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, discussed how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved efficienc...
Businesses are struggling to manage the information flow and interactions between all of these new devices and things jumping on their network, and the apps and IT systems they control. The data businesses gather is only helpful if they can do something with it. In his session at @ThingsExpo, Chris Witeck, Principal Technology Strategist at Citrix, will discuss how different the impact of IoT will be for large businesses, expanding how IoT will allow large organizations to make their legacy ap...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
SYS-CON Events announced today that CDS Global Cloud, an Infrastructure as a Service provider, 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. CDS Global Cloud is an IaaS (Infrastructure as a Service) provider specializing in solutions for e-commerce, internet gaming, online education and other internet applications. With a growing number of data centers and network points around the world, ...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lea...
24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to connect your brand strategy with the right consumer. 24Notion ranked #12 on Corporate Social Responsibility - Book of List.
Why do your mobile transformations need to happen today? Mobile is the strategy that enterprise transformation centers on to drive customer engagement. In his general session at @ThingsExpo, Roger Woods, Director, Mobile Product & Strategy – Adobe Marketing Cloud, covered key IoT and mobile trends that are forcing mobile transformation, key components of a solid mobile strategy and explored how brands are effectively driving mobile change throughout the enterprise.