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Cobalt consumption in EV batteries rose 63% in 2022 y-o-y - report

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(Kitco News) - The Cobalt Institute ("CI"), citing data prepared by Wood Mackenzie, reported yesterday that cobalt metal prices tumbled by 20% over Q4 2022 as elevated energy prices and rising inflation continued to hurt demand.

"The feedstock market remained relatively quiet over Q4. High stocks and improved logistics dragged hydroxide payables down to the high 50s. The souring sentiment also extended to chemical markets with prices for both cobalt sulphate and tetroxide plunging through Q4 2022," CI said.

CI also said that global sales of battery electric vehicles and plug-in hybrid electric vehicles rose by 56% year-on-year to 3.5 million units in Q4 2022, adding that 2022 saw an increased share of cobalt-free chemistries in electric vehicles battery formulations.

However, despite the reduced cobalt intensity per vehicle, cobalt consumption in electric vehicles jumped by over 60% year-on-year in 2022, it added.

Importantly, the pace of aerospace recovery slowed but there was impressive annual growth overall, CI said. According to the report, in aggregate, the aerospace sector has demonstrated remarkable resilience in the wake of Covid with air travel up 18% year-on-year in 2022.

"This increased demand has supported alloy cobalt demand and driven strong financial performance from major superalloy manufacturers," the authors of the report found.

In the long term, CI expects that there is a high probability of greater and faster electric vehicles adoption globally, putting increased strain on cobalt sulphate availability, which is an upside for cobalt.

In addition, an accelerated energy transition will require more cobalt in areas such as power generation and energy storage, CI noted.

On the supply side, CI said that there is a medium probability that ESG concerns around artisanal mining, emissions and waste disposal will slow copper and nickel developments in the DRC and Indonesia, therefore tightening mine supply.

At the same time, CI pointed out that there is a high probability that ESG and cost concerns or disruptive battery technologies trigger faster cobalt substitution across battery applications, which is a potential downside for cobalt demand.


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