Cobalt, a metal used in most electric vehicle batteries, has been the best performing financial asset this year, rising almost 80 per cent. That’s a better performance than bonds, currencies and equities, according to Macquarie.
Mostly mined in the Democratic Republic of Congo, cobalt supply is already being strained by demand for electric vehicles. It’s also being squeezed by investors, who have bought up large stockpiles of the metal.
Cobalt 27, which has amassed more than 2,000 tonnes of cobalt, listed in Toronto in June, offering investors a chance to benefit from the hoard.
Cobalt is already used in batteries for laptops and smartphones, but that market is only expected to grow by 2 per cent over the next few years. In contrast, electric and hybrid cars are expected to drive a 39 per cent jump in cobalt demand through to 2022 even as carmakers reduce the amount they use per battery to save costs, according to Macquarie.
“It’s a really bright future for cobalt,” Vivienne Lloyd, an analyst at Macquarie, says. “There doesn’t seem to be enough of it.” The current cobalt market can only meet demand for about seven to eight million vehicles, Ms Lloyd estimates.
Lithium, nickel and copper, other metals used in EV batteries, have also benefited this year. Lithium demand is expected to grow by four times by 2025 due to electric vehicles, according to Goldman Sachs.
Source: www.ft.com
