FT: China’s share of global cobalt production will rise to 50% within two years

China is ramping up its cobalt production and its market share in this market will increase from 44% to 50% in the next two years. Writes about it Financial Times with reference to the data of the trading company Darton Commodities. China already accounts for 77% of the world’s cobalt refining and processing – in the past five years, this area in China has more than doubled, reaching the processing of 140 thousand tons of cobalt per year.

Cobalt is an important component in the production of batteries for electric vehicles, and is also used in various electronics. The growth of cobalt production in China takes place against the backdrop of a significant decline in metal prices. Since last May, when they peaked at $88 per kilo, the price has dropped 60% to $35. This is due to a simultaneous increase in supply and a decrease in demand for this metal. In 2021, cobalt production increased by 23% to more than 150 kt, primarily due to an increase in production in the Democratic Republic of the Congo and increased entry of Indonesia into this market.

The drop in demand is due to a combination of factors such as declining demand for electronics, easing logistical challenges, lockdowns in China, and the proliferation of electric vehicle batteries of a type that requires less or no cobalt.

According to experts, price cuts threaten cobalt processing projects outside of China, which automatically strengthens China’s position. The United States and the countries of Western Europe are seriously concerned about the growing dependence on China, which are looking for opportunities to reduce such dependence and develop their own projects in this direction.

Yana Rozhdestvenskaya