CHART: Price spike doubles value of cobalt EV battery market

At the start of the year cobalt prices fell to their lowest level ever on an inflation adjusted basis and reached near decade lows nominally.  

A surge in supply from the Congo, responsible for 80% of the world’s cobalt output, coupled with tepid demand from the electric vehicle market, saw cobalt sulphate entering the EV battery supply chain in China fall to an average of just $3,556 per tonne in January.  That compares to a peak of nearly $19,000 a tonne in 2022.

Copper production in the DRC, with a big chunk owned by Chinese companies, was rising fast – leading to a near 40% jump in the country’s co-product cobalt output in 2024, but in February the country announced a four month ban on exports to ease the glut. 

Cobalt sulphate prices duly responded, jumping more than 60% in March to average $5,767 a tonne, and holding onto most of those gains in April.   

Cobalt byproduct output is also increasing in Indonesia as its nickel shipments ballooned and the DRC is now in talks with the Asian nation to collaborate on managing supply of cobalt including the use of quotas. 

Cobalt consumption in EV batteries overtook other sources of demand like aerospace several years ago and the impact of the DRC strategy has been swift.  

The latest data from Adamas Intelligence tracking EV battery metal deployment in over 120 countries paired with monthly prices shows the cobalt market springing back into life. 

The estimated size of the battery cobalt market shot up in March to an overall $152.4 million, up 120% over February and the highest since December 2022, lifting the value of sales weighted average cobalt contained in tandem. 

While March was a good month across the board for the EV industry and by extension battery metal deployment, and January and February are generally quiet months for passenger vehicle sales, cobalt vastly outperformed other battery metals. 

Nickel rose by a more subdued 41%, also amid rising prices, while the value of battery lithium deployment increased by 28% month over month, relying on rising EV sales in Asia more than prices, which are still bobbing along near the bottom of the cycle.  

And while price can make all the difference for suppliers to the EV battery market, longer term trends for cobalt (and its ternary cathode cousins) in the EV market are less encouraging. 

Lithium iron phosphate or LFP batteries continue to rapidly take market share from NCM (nickel-cobalt-manganese) and NCA (nickel-cobalt-aluminum) cathode chemistries. 

The China-fueled rise of LFP has fostered a large divergence in global consumption growth rates of key battery metals, according to Adamas Intelligence data.

For example, in calendar 2024 iron and phosphorous deployment were up by 54% and 49%, respectively, for a combined 399.1 kilotonnes contained in the batteries of sold EVs over the course of the year.

Chinese vessel collects cobalt samples in the Pacific – Xinhua

In contrast, global nickel deployment into EV batteries increased 11% to 322.7 kt while that of manganese rose 10% to 73.6 kt and cobalt 7% to 59.6 kt as the industry continues to thrift the metal.  Keeping in mind that the installed tonnage does not take into account any losses during processing, chemical conversion or battery production scrap (often well into double digit percentages) so required tonnes are meaningfully higher at the mine mouth. 

In total, installed tonnage of nickel, cobalt and manganese last year represented 21% of the battery metal basket.  

That’s down from a 24% share in 2023 and 36% in 2020 when top EV maker BYD shifted to an all-LFP line-up, and LFP-powered Tesla Model 3s re-ignited uptake of the Ni-Co-Mn-free battery chemistry. 

The world’s largest EV battery maker CATL, responsible for 30% of total battery capacity deployed globally in GWh terms, in April announced that commercial production of sodium-ion packs will begin before the end of 2025. Due to its inherent limitations, sodium-ion is more likely to eat into LFP’s market than NCM’s.

At least there’s that.    

For a fuller analysis of the EV battery metals market check out the May issue of The Northern Miner print and digital editions.

* Frik Els is Editor at Large for MINING.COM and Head of Adamas Inside, providing news and analysis based on Adamas Intelligence data.