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“The price of cobalt has been fluctuating and there have been questions about whether cobalt can be substituted by nickel, but for consumer electronics the direction is LCO battery, which will not be replaced by ternary [nickel-cobalt-manganese] materials,” Xu said during a panel discussion at the Antaike Nickel & Cobalt Conference in Xiamen, China, on Thursday November 8.
Cobalt prices hit near 10-year highs of $43.70-44.45 per lb, in-warehouse, in April this year, having set 12-year lows of $9-11.15 per lb in December 2015, according to Fastmarkets MB data.
Benchmark low-grade cobalt prices were last assessed at $33.50-34.45 per lb on November 7.
Anticipated growth in the electric vehicle (EV) and battery sectors and the associated increase in demand for cobalt has been key to underpinning and driving cobalt prices higher since 2016, which also prompted some industries to look at substituting or adopting battery chemistries that require less cobalt.
Power banks are a consumer electronics product that some in the market see as most likely to face the substitution of LCO battery by NCM battery, but Xu did not agree with this.
Power banks used NCM or lithium maganate batteries when they were first introduced to the market, so has been no substitution at all, according to Xu.
In the EV sector, investment is being made into nickel-rich NCM batteries that require less cobalt and offer higher driving ranges: a shift supported by the Chinese government’s EV subsidy policy.
The country’s EV subsidy policy launched in February encouraged the production of pure EVs with higher driving range and energy density, which would led to the adoption of nickel-rich battery.
But cobalt demand from the consumer electronics sector is likely to grow, Xu told delegates in Xiamen.
LCO battery requires 10 times more cobalt than NCM battery, according to Xu, adding that many new trends for smartphones will help to add more demand of cobalt.
“The penetration of smart phones is a large drive for cobalt demand as running numbers of applications on the phone requires higher energy,” Xu said.
“We now have mobile phones which are equipped with two batteries; in addition, 5G will start to acquire some market share next year,” Xu added. “All of [these factors] will boost demand for cobalt.”
Additionally, the majority of laptops will continue to be powered by LCO battery, Xu said.