Cobalt Market. Supply and Demand
There have been many major changes in the cobalt market over the last twenty-five years. We have seen a significant increase in the number of cobalt producers and production has changed form being predominantly copper-based to nickel-based and in most recent years to primary operations. On the demand side, we have seen a move away from low value applications to specialised apllications which rely on the unique properties of cobalt.
Cobalt Production
Between 1980 and the present day, world wide refined cobalt production has more than doubled. Half-yearly estimates indicate that refined cobalt availability for 2005 exceed 52000 tonnes.
Refined Cobalt Availability
| Member Companies | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |
| Chambishi* | 5011 | 3946 | 2316 | 2789 | 4344 | 4570 | 3769 |
| CTT | 241 | 470 | 1200 | 1200 | 1354 | 1431 | 1593 |
| Eramet | 172 | 180 | 204 | 199 | 176 | 181 | 199 |
| Falconbridge | 3851 | 4009 | 3433 | 3314 | 3993 | 4556 | 4670 |
| ICCI | 2640 | 2770 | 2855 | 2943 | 3065 | 3141 | 3225 |
| Inco | 1740 | 1420 | 1470 | 1450 | 1480 | 1000 | 1562 |
| Norilsk | 3700 | 4000 | 4100 | 4600 | 4200 | 4654 | 4524 |
| OMG | 5250 | 6200 | 7700 | 8100 | 8200 | 7990 | 7893 |
| QNI | 1395 | 1539 | 1520 | 1818 | 1863 | 1800 | 1900 |
| Sumitomo | 329 | 221 | 311 | 350 | 354 | 379 | 429 |
| Umicore | 1200 | 950 | 1110 | 1090 | 1135 | 1704 | 2947 |
| TOTAL | 25529 | 25705 | 26219 | 27853 | 30164 | 31406 | 32711 |
| Non-Member Companies | |||||||
| Brazil | 364 | 630 | 792 | 889 | 960 | 1097 | 1155 |
| Bulong | 79 | 192 | 203 | 200 | |||
| China | 1200 | 1200 | 1200 | 1470 | 1842 | 4576 | 8000 |
| Gécamines | 4490 | 5180 | 5180 | 3199 | 2149 | 1200 | 735 |
| India | 120 | 120 | 120 | 250 | 270 | 255 | 545 |
| Kasese | 77 | 77 | 634 | 450 | 457 | ||
| Mopani Copper | 1876 | 1800 | 2050 | 2022 | |||
| Murrin Murrin | 83 | 83 | 1452 | 1838 | 2039 | 1979 | |
| RSA | 320 | 320 | 320 | 252 | 250 | 285 | 300 |
| TOTAL | 6494 | 7689 | 7689 | 10225 | 9759 | 11502 | 15193 |
| Other Sources of Supply | |||||||
| DLA Deliveries | 2310 | 1679 | 3083 | 1893 | 1284 | 1987 | 1632 |
| Other stockpile | |||||||
| TOTAL | 2310 | 1679 | 3083 | 1893 | 1284 | 1987 | 1632 |
| TOTAL Supply | 34333 | 35073 | 38703 | 39971 | 41207 | 44895 | 49536 |
| * Total Zambian production to 1999 | |||||||
Without doubt, the most impressive increase has been noted in China, particularly in the last four years and in 2005 production is estimated at about 23% of world wide production.
Production has shifted from being a by-product of copper to a by-product of nickel and a primary product. In 1980 about 73% of refined cobalt was produced from copper ores and about 23,5% form nickel ores. Very little primary cobalt was produced.
In 2005 only about 7% of world wide cobalt was produced from copper ores, but that from nickel ores was total about 41,5%. More strikingly (exluding China) about 23,6% of cobalt production will be primary production.
Cobalt Demand
Over the past decade, demand was very healthy, growing strongly even when cobalt price was over US$30.00/lb. In the later half of 2001 demand showed a temporary reduction following the attack on the World Trade Center and decline in worldwide economies. Since 2002 demand has increased phenomenally and estimates suggest that it was about 54000 tonnes in 2005.
Since 1997 we have seen a major shift in markets to Asia, with China becoming particularly important. Since 1997 Chinese demand has grown from about 1000 tpa to 9500 tpa in 2005. Demand in Japan and South Korea has increased by 58% and 35% respectively in the last four years. In contrast, a cursory glance at American and European data showes that demand has been relatively stable during the period. In 2004, cobalt demand in Asia totalled about 58% of total world wide demand, America and Europe accounting for 20% each.
The Uses of Cobalt
Until recently superalloys has been the largest end-use application of cobalt. Following the attack on the World Trade Center in the USA there was a huge decline in demand but recovery has occurred since then and demand is more or less back to former levels. In the future the sector is projected to grow steadily.
In the last decade there has been a significant increase in the use of cobalt as a catalyst. One of the major uses is in the production of terephthalic acid (PTA) and dimethyl terphthalate (DMT) for the manufacture of polyethylene terephthalate (PET) used to produce polyester fibres and synthetic textiles for packaging, PET bottles and cording tape. Cobalt containing CoMoX catalysts are used in the desulphurisation of crude oil.
Also cobalt is used to produce synthetic fuels from coal gas. Gas to liguid technology (GLT) was developed 80 years ago by German chemists. In the 1950s, this technology was used in South Africa by Sasol to produce about 8000 bpd of synthetic fuel. Catalysts used are mainly cobalt, iron or platinum group metals. Currently there are three commercial GTL plants operating world wide which produce a minute amount of fuel compared to the world wide production of crude oil. The interest in GLT lies in the future.
Cobalt demand in the Tungsten Carbide/ Diamond Tools sector has traditionally been related to industrial activity and is expected to do so in the future. Cobalt is the most suitable binding materials for WC components. In the diamond tool sector, alloy powders have been partially substituted for cobalt for economic reasons. Growth prospects for cobalt in the diamond tool sector are limited and most analysts predict that cobalt demand will remain flat or even decline marginally in the next couple of years.
Cobalt in Li-ion batteries. Rechargeable battery demand has risen dramatically over the last decade. In 1993 the global market totalled about 1.4 billion cells, most of which were nickel/cadmium. Since then however, apart from a slight decline in 2001, demand has grown rapidly to an estimated 3.7 billion units in 2004. Li-ion batteries accounted for about 1.3 billion of these.
The most promising development appears to be hybrid electric vehicles (HEV) which combine a conventional internal combustion engine with an electric motor. Today most hybrid electric vehicles use nickel metal hydride batteries but in the long term the preferred battery is li-ion.
Also cobalt is used in organic chemicals. Cobalt carboxylates probably account for about 10% of the world wide cobalt market. They are used as paint and ink dries and to promote adhesion between the rubber and steel in radial tyres.
Source - Cobalt Development Institute