A glance through the latest expert views and predictions about commodities: Cobalt, Nickel, Gold, Kaolin & HPA
-Nickel/manganese/cobalt use forecast to double in 20 years
-Macquarie’s base case is for a significant over-supply of nickel from 2022 onwards
-UBS maintains a downward bias towards gold
-A significant new supply of kaolin needed to match demand
-HPA market is projected to grow at 17% annually over seven years
Cobalt: Local players leveraged to a structural deficit
While the cobalt market has traditionally been in the form of lithium cobalt oxide (LCO) cathodes, Canaccord Genuity believes the rapid adoption of electric vehicles (EVs) and the use of nickel manganese cobalt (NMC) cathodes is set to push the market into deficit. The broker anticipates the total market growing at 8% compound annual growth rate (CAGR) until 2030, more than doubling in size from 128kt in 2020 to 272k in 2030, with a 31kt shortfall.
However, Canaccord expects the supply issue to become more acute as early as 2024 when the market enters a deficit, which the broker doesn’t expect to close without significant investment or demand destruction from high prices.
Supply of cobalt – which is largely a by-product of copper and nickel production -- is dominated by the Democratic Republic of Congo (DRC), which supplies 70% of the global market and Canaccord expects the DRC to maintain its market position out to 2025.
However, Canaccord notes social and governance risks in the DRC is...
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