Cobalt has been used as a blue coloring agent in pottery, glass and ceramics for thousands of years.
However, more recently, demand from high-tech sectors has overshadowed traditional cobalt uses. Today, this critical metal is an essential ingredient in electric vehicle (EV) batteries, energy storage systems, metal alloys and more.
Given those factors, many investors are now wondering how to invest in cobalt. To help those interested in the sector, we’ve put together a brief guide on cobalt supply and demand and different investing options.
It’s tough to say exactly when and by how much cobalt demand will rebound in the coming years, but as noted, the lithium-ion battery market will be a huge driver of that demand.
“Falling cobalt prices may lead OEMs in certain markets to reconsider lower nickel NCM batteries, with higher cobalt content, due to the potential cost savings,” notes Fastmarkets in its report.
For investors interested in cobalt, and there are two main ways to gain exposure.
The second option is to invest in cobalt-focused companies. Benchmark Mineral Intelligence Chief Data Officer Caspar Rawles has recommended that any investor interested in investing in cobalt look at copper and nickel companies that are mining or exploring for cobalt, “unless (they) are lucky enough to find a (junior with a) deposit that is primarily cobalt.”
He added, “I think the key for smaller companies is to be targeting value-added products further downstream than simply a concentrate, such as cobalt sulfate, targeting the battery supply chain.”
This is an updated version of an article originally published by the Investing News Network in 2010.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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