Analysis of Cobalt Price Trends and the 'De-Cobaltization' of the Battery Industry Chain

Based on the market information I have collected, there is some controversy regarding the specific data of cobalt prices surging by 190% within the year. Data from different sources shows discrepancies in cobalt price trends [1][2].

Market information shows that cobalt prices have dropped from approximately $70,000 per ton in 2022 to around $30,000 per ton in 2024 [2]. However, CMOC Group, the operator of Tenke Fungurume Copper-Cobalt Mine (the largest cobalt miner in the Democratic Republic of the Congo), stated that the era of cobalt-dependent batteries is coming to an end [1]. This view reflects the industry’s cautious outlook on cobalt’s prospects.

Global cobalt supply is mainly concentrated in the Democratic Republic of the Congo, and any disruption in supply from this region may affect global cobalt prices. China has become the world’s largest producer and consumer of cobalt.

Battery technology is undergoing significant changes, mainly reflected in the following aspects:

1. Rise of Lithium Iron Phosphate (LFP) Batteries
   : LFP batteries contain no cobalt at all and have already captured about 34% of the global electric vehicle battery market share, which is expected to rise to 39% in 2024 [3]. LFP batteries not only avoid supply risks of cobalt and nickel but also effectively reduce supply chain costs.

2. High-Nickel Low-Cobalt Technology Route
   : NCM (Nickel-Cobalt-Manganese) and NCA (Nickel-Cobalt-Aluminum) batteries continue to reduce the proportion of cobalt content; some high-end batteries have already reduced cobalt content to below 10%.

3. Cost Advantages Highlighted
   : The price of LFP battery packs has dropped to $75/kWh, giving them a significant cost advantage in the Chinese market [4].

• Cost Pressure
  : Traditional high-cobalt battery manufacturers face risks of upstream cost fluctuations
• Pressure for Technological Transformation
  : Need to accelerate R&D of low-cobalt or cobalt-free battery technologies
• Erosion of Market Share
  : LFP batteries continue to gain competitiveness in the mid-to-low-end market

• Improved Supply Chain Stability
  : Reduce reliance on cobalt resources from the Democratic Republic of the Congo
• Optimized Cost Structure
  : LFP batteries have obvious cost advantages, and global battery prices are expected to further decline in 2026 [4]
• Differentiated Competition
  : Companies with LFP technology advantages will gain a larger market share

In the electric vehicle battery field, the following directions can be watched:

• Leading companies with LFP battery technology advantages
• Battery enterprises with low cobalt resource reserves
• Enterprises leading in high-nickel battery technology

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[1] Bloomberg - “World’s Biggest Cobalt Miner Is Gloomy on the EV Metal’s Future” (https://www.bloomberg.com/news/articles/2024-11-06/world-s-biggest-cobalt-miner-is-gloomy-on-the-ev-metal-s-future)

[2] Yahoo Finance - “Stellantis N.V. Among the Best EV Battery Stocks” (https://finance.yahoo.com/news/stellantis-n-v-stla-among-202826254.html)

[3] Forbes/CME Group - “Cobalt And Lithium – A Tale Of Two Battery Metals” (https://www.forbes.com/sites/cme-group/2023/06/01/cobalt-and-lithium--a-tale-of-two-battery-metals/)

[4] Bloomberg - “China’s Batteries Are Now Cheap Enough to Power Huge Shifts” (https://www.bloomberg.com/news/newsletters/2024-07-09/china-s-batteries-are-now-cheap-enough-to-power-huge-shifts)