Why is everyone talking about ASX cobalt shares this week?


Cobalt is another hot commodity charging towards new record highs this week. As the price of the metallic chemical element has strengthened, so too have the share prices of ASX-listed cobalt shares.

While it may not have the same notoriety as lithium, cobalt has become a staple of lithium-ion battery chemistries. Its application helps ensure the cathodes in batteries do not overheat, extending the economical life of a typical electric vehicle (EV) battery.

Let’s take a look at what is playing out in the cobalt world.

Tailwinds aplenty for commodity

Unlike some of the other commodities experiencing runaway prices, the surge in the price of cobalt has been playing out over a longer timespan.

Projections — such as those from McKinsey — suggest that one in four vehicles on the road will be electric by 2030. These expectations have fed into higher cobalt prices as manufacturers look to shore up future supply.

Commodity bull market/inflation squeezes electric vehicle companies. Average #EV requires;
* 10 kilograms of #lithium (its price is +90% this year)
* 45 kilograms of #nickel (price up 130%)
* 20 kilograms of #manganese (price steady)
* 14 kilograms of #cobalt (price up 12%)

— Jessica Amir (@JessicaDAmir)

March 9, 2022

According to Trading Economics, the cobalt price is hovering around US$82,000 per tonne. This represents an increase of approximately 56% compared to a year ago. Such a substantial increase has also boosted ASX cobalt shares.

The commodity’s price has been steadily climbing during the past year. However, it appeared to plateau just above US$70,000 per tonne between late December to mid-February.

Although, Russia’s invasion of Ukraine and subsequent sanctions might be behind the latest uptick.

According to information published by the US Geological Survey, Russia was the second-largest producer of cobalt in 2021 with 7,600 tonnes.

In total, Russia’s cobalt supply made up around 4.5% of the world’s production. Though, this is dwarfed by the ~70% contributed by Congo.

Cobalt Blue Holdings Ltd (ASX: COB) is one ASX-listed cobalt explorer that has shuffled into the spotlight recently. The company was granted “major project status” by the Federal government last week as Australia looks to play a key role in the supply of the booming commodity.

Furthermore, Cobalt Blue’s Broken Hill Cobalt Project plans to produce 16,700 tonnes per year. Based on our previously referenced figures, this would slot Australia in at number two of global cobalt producers.

Another ASX cobalt share riding the price rise is Jervois Global Ltd (ASX: JRV). The billion-dollar cobalt company has enjoyed a 28% jump in its share price since the new year ticked over.

Source: Read More

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