DeZwarteRidder schreef op 12 sep 2019 om 18:25:
Cobalt rockets as Glencore plans closure of major mine
Price spike is relief to miners whose shares have suffered from global growth fears
Henry Sanderson August 16, 2019
The price of cobalt has soared more than 30 per cent since Glencore announced this month it would close the world’s largest mine for the battery metal, offering hope for a sector whose shares have been hit by fears over a global recession.
The rise of electric cars propelled cobalt to its highest level in 10 years of $44 a pound in April last year, before crashing to $12 following a surge in supply and stockpiling by companies in the battery supply chain.
Glencore, the world’s largest producer of cobalt, said early last week that it would shut its Mutanda mine in the Democratic Republic of Congo at the end of this year, saying mining the metal was no longer “economically viable”. Since then, cobalt prices have risen almost one-third to trade at $16 a pound on Friday, according to Fastmarkets.
The closure was “definitely needed to stimulate long-term investment in cobalt supply,” said George Heppel, an analyst at consultancy CRU in London. “With cobalt at $12 a pound that was not sufficient to keep the market well supplied in the long run.”
The price rise will come as a relief to cobalt miners, whose shares have suffered from growing fears about a global economic slowdown following US President Donald Trump’s decision to impose 10 per cent tariffs on $300bn worth of Chinese exports in July.
Shares in Glencore have slipped 23 per cent this year, hitting their weakest level since October 2016 this week. JPMorgan analysts downgraded their rating on the stock to “underweight” late this week, saying the US-China trade war could threaten the miner’s dividend by hitting commodity prices.
The DRC is the world’s largest producer of cobalt, which the country mines alongside copper. But a surge in supply from new mines and an influx of small-scale miners has been one of the key reasons behind cobalt’s price crash.
Cobalt demand from smartphone makers has also slowed as the global market reaches saturation. Mobile phone sales fell 5 per cent in China in the first seven months of this year, according to CRU.
But prices are likely to rise further, said Mr Heppel, as the closure of Glencore’s mine shifts the global market from surplus to deficit next year.
Apart from Mutanda, Glencore also produces cobalt from its Katanga mine in the DRC, as well as its Murrin Murrin deposit in Australia and nickel operations in Canada.
Carmakers are trying to reduce the amount of cobalt in their batteries because of the risks of supply-chain disruption, but that fall is likely to be offset by growth in demand for electric cars, according to Benchmark Mineral Intelligence. Cobalt is critical for battery safety in lithium-ion batteries, which can catch fire because of the flammable electrolyte.
BMW in April agreed to buy cobalt for its batteries from Glencore’s Murrin Murrin mine in Australia.