CRU is forecasting that cobalt demand for electric vehicles will account for more than 120,000 tonnes or approximately 45% of the total by 2025; this compares to 39,000 tonnes or 27% of the total in 2020. Cobalt supply remains volatile as it is the by-product of copper mining and it has been difficult to invest in cobalt-specific capacity.
The resulting anticipation of cobalt deficits has been instrumental in price gains of around 50% year on year to June. The LME cobalt cash average actually declined from US$ 48,965 per tonne in April to US$ 44,248 in May and then US$ 44,127 in June.
The story for nickel is different. Having increased 41% year on year to June 2021, the second quarter saw the LME nickel cash average climb from US$ 16,480 per tonne in April to US$ 17,605 in May and US$ 17,943 in June. Although a high percentage is used in electric vehicles, concerns over nickel stocks have dissipated since Tsingshan announced that it was converting NPI to nickel matte. So why the price increase?
During the pandemic, all metal commodities have been a haven for speculators in some form at some point. Stainless steel demand has been consistently good but it has been a tough year for the superalloy market. There has been some demand from the oil & gas industry, while some aerospace orders have also filtered through unexpectedly early as mills had been forecasting this would not happen until the fourth quarter of 2021 or the opening quarter of 2022. This could be the supply chain readying itself for recovery as Boeing and Airbus are set to boost production.
Steelworks’ demand for high NiCr/NiCrMo scrap is still at a good level despite a reduction for the summer holiday period.
Siegfried Jacob Metallwerke GmbH & Co KG (DEU)