Cobalt Prices Hit Lowest Level Since 2016 Due to Record Production

Cobalt prices have dropped to their lowest level since 2016, driven by a surge in global production that continues to exert downward pressure on the value of the key battery material. As of January 23, spot cobalt traded at $11.02 per pound, a significant decline in value as supply levels remain elevated.

The decline in cobalt prices comes as production reaches record highs. CMOC Group Ltd., the world’s largest cobalt producer, announced that it surpassed its 2024 full-year production forecast within the first nine months of the year, producing 114,165 tons. The Chinese company has since issued guidance for 2025, projecting output to range between 100,000 and 120,000 tons, maintaining its current level of activity. This sustained output is supported by expanded operations at its two key African mines, which remain pivotal to its strategy.

The cobalt mining industry has seen an increase in output in recent years, partly due to its ties to copper mining. Cobalt is often extracted as a by-product of copper production, and CMOC has shown optimism about the long-term prospects for copper. For 2025, CMOC has set its copper production target at 600,000 to 660,000 tons, following its 2024 output of approximately 650,000 tons. This interconnected production of cobalt and copper has compounded the supply glut, further influencing cobalt prices.

The cobalt market has faced challenges beyond oversupply. Demand for cobalt has been volatile, with the material primarily used in the production of batteries for electric vehicles and other technologies. While the electric vehicle market continues to grow, advancements in battery technology have shifted some demand away from cobalt-intensive chemistries, adding further complexity to the market dynamics.

CMOC’s latest output guidance reflects confidence in its operational capabilities, but the sustained high production levels could prolong the period of low prices if demand does not rise to meet supply. The company’s continued reliance on African mines underscores the region’s critical role in global cobalt supply chains, as African countries remain the dominant producers of the metal.

As the cobalt market navigates these challenges, the interplay between production levels, demand shifts, and evolving technologies will continue to shape its trajectory. For now, the market faces an oversupply situation that has brought cobalt prices to their lowest in nearly a decade, signaling potential turbulence ahead for the industry.

 

 

 

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

By Matthew Evanoff

I specialize in the mining industry, focusing on top global mining stocks. My reporting covers the latest industry news, company/project developments, and profiles of key players. Beyond my professional pursuits, I have a keen interest in global business and a love for travel.

Comments are closed.

If you would like to receive our free newsletter via email, simply enter your email address below & click subscribe.

MOST ACTIVE MINING STOCKS

 Daily Gainers

ADE.V +100.00%
CCD.V +50.00%
CGD.V +44.83%
KGC.V +33.33%
RKR.V +33.33%
CASA.V +30.00%
LSA.AX +25.00%
RTG.TO +25.00%
POS.AX +25.00%
NAE.AX +25.00%