EV suppliers in race to secure cobalt as funds stockpile key rare material

March 01, 2017

Suppliers to electric vehicle (EV) manufacturers are rushing to amass shipments of vital lithium ion battery material cobalt, after a series of hedge funds amassed a huge stockpile of the scarce material.  

In a bullish bet on an electric vehicle market exceeding expectations, leading to soaring prices, six funds, including China’s Shanghai Chaos and Swiss-based Ala Investments, have acquired and stored an estimated 6000 tonnes of cobalt. This haul is worth up to €280 million and equivalent to 17% of all cobalt produced globally last year.  

Suppliers such as Tesla battery supplier Panasonic are rushing to lock up the short supply, with global demand already expected to outstrip supply this year by 900 tonnes according to commodity experts CRU. The global cobalt market is relatively small, with the nascent electric vehicle industry already accounting for around half of annual consumption. The material improves the stability and capacity of the electric vehicles’ powerful lithium ion batteries. The Chinese electric vehicle industry has also started to switch to using cobalt, with Goldman Sachs predicting China’s demand will almost double by 2025.

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March 31, 2017

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