While 2017 still has a few days to go, it’s a sure bet that cobalt will be the best-performing metal for the year.
LME cobalt started the year at just US$32,734 and closed overnight at a fresh high of $75,205/t, a stunning rise of 129.7%.
“Cobalt rode the feverish buzz around electric vehicles (EVs) and growing concerns about future supply availability to the top spot among commodities in 2017, mirroring lithium’s 2016 gains on similar themes,” Scotiabank said.
“This recent spell of outperformance comes after a decade of chronic oversupply and meandering prices in the $12–20/lb range, but cobalt is making up for lost time and has more than doubled this year to $33/lb.”
Scotiabank noted that demand was strong from the growing battery sector and supply was inelastic, unlike other commodities.
“On the demand side, the world is increasingly running on battery power and cobalt is a core feedstock for most battery chemistries; in fact, despite lithium’s stronger name association (i.e. ‘lithium-ion batteries’), cobalt is more leveraged toward energy storage demand—48% of cobalt ended up in battery packs vs only 34% of lithium last year,” it said.
“The present excitement around electric vehicles is the perfect driver of a bull market for cobalt, with estimated future battery demand far outstripping current global production capacity, even under conservative adoption scenarios.”
The price rally has resulted in some major moves among ASX juniors.
As of yesterday’s close, Australian Mines was up by 1275% for the year.
The company has the Sconi and Flemington projects, the latter of which is near Clean TeQ Holdings’ Sunrise project.
Clean TeQ has notched up a 180.4% rise this year – briefly becoming a A$1 billion company in recent weeks – while another neighbour, Jervois Mining, is up by 1232% in 2017 after years in the wilderness.
Another New South Wales player, Collerina Cobalt, is up by 1127.3% for the year.
Ardea Resources listed early in 2017 and finished yesterday 712.5% above the 20c issue price in its initial public offering.
Cobalt Blue Holdings listed at 20c earlier this year and reached an all-time high of 82c yesterday, a nice 310% gain.
More recent debutante Northern Cobalt is 155% up on its IPO price.
And the offshore cobalt plays didn’t miss out on attention.
European Cobalt has posted a year-to-date gain of 962.5%, Celsius Resources is up by 447%, Meteoric Resources is up by 391.7% and Cape Lambert Resources is up by 338.5%.