Cobalt prices are likely to continue to rise in the first quarter

Experts at the Taiwanese data analysis company EnergyTred warned that a 26-pound increase in cobalt prices in the first quarter of this year could have serious price implications for lithium ion battery makers.

According to the new data, the cost of cobalt has reached $95 per kilogram, an increase of 114 per cent a year over the $32 per kilogram Gaochu at the beginning of 2017. EnergyTred said that this high cost of cobalt, half of which comes from the politically unstable Democratic Republic of the Congo, will continue to pose price challenges to the fixed storage and electric vehicle(EV) industries. Both industries are hedging their futures as the price of lithium-ion batteries falls.

Cobalt's use of these chemicals has enabled battery manufacturers to increase the energy density of their products, while the number of new and next generation alternatives is increasing. Future price reduction projections are mostly based on the cost of raw materials that are cheaper than today.

DuffLu, Senior Research Manager of EnergyTred, said that the increase in cobalt metal prices was "influenced by short-term speculation in the market", suggesting that prices might fall in the near future. Cobalt costs currently depend only on the supply side, not supply and demand, Lu added.

In addition, second-line battery manufacturers(ie, smaller battery manufacturers) do not have banks to ensure the best price, so they are most at risk of being affected by the sharp increase in cobalt costs, and many rely excessively on the cost considerations of first-line manufacturers.

That could lead to less diversification of supply, stagnant innovation and weak market competitiveness, he said.

One solution is for battery system manufacturers to accelerate the development of a new generation of materials in their batteries. Products with a higher proportion of nickel, Silicon oxide or cathode materials can be produced using less cobalt, while mixed polymer solutions(such as NMC and LCO batteries(where these components are mixed into the anode materials of lithium ion batteries) may be 20 Lu, The current energy density has been reduced by 100 per cent, but it represents the right direction for technological development.

"Major battery suppliers such as Samsung SDI, LG Chemical and Li-Shen have proposed mixed polymer solutions, with NMC components higher than 20 degrees," Lu said.

"However, the expansion of the battery is still a problem in the application of NMC materials in polymer batteries. Therefore, the industry has not yet accumulated complete research and development experience. In the second half of 2018, there will be an opportunity to see a small number of mixed polymer batteries on the market. However, if cobalt prices fall rapidly in the future, further observations are needed to determine whether the development of mixed polymer solutions is valuable to the market. "

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