Cobalt price at lowest since 2016 amid record production

The oversupply of cobalt poses a significant hurdle for the market, particularly as demand for EV batteries grows more slowly than anticipated. However, the long-term prospects for cobalt remain tied to advancements in battery technology and the transition to renewable energy.

Cobalt prices have tumbled to their lowest point since 2016, pressured by unprecedented production levels as the demand for the battery material struggles to keep pace. This dramatic price drop highlights the challenges facing the industry, particularly as global supply chains contend with excess inventory.

Record-High Production Drives Market Glut

China's CMOC Group, the world’s largest cobalt miner, has been at the forefront of this supply surge. The company achieved a new production milestone in 2024, delivering 114,165 tonnes of cobalt, and has committed to maintaining similar levels through 2025. According to CMOC’s latest production guidance, shared on its WeChat account, output is expected to range between 100,000 and 120,000 tonnes annually through 2025.

Remarkably, CMOC managed to surpass its 2024 full-year production forecast within just nine months. This achievement is attributed to the ramp-up of its operations at two major mines in Africa, further consolidating its dominance in the global cobalt market.

Cobalt Spot Prices Slide

As of January 23, 2025, cobalt spot prices were trading at $11.02 per pound, marking a significant decline. For context, prices have fallen steeply from their peak levels in recent years, reflecting an oversupplied market coupled with sluggish demand growth in sectors like electric vehicle (EV) batteries.

Copper as a Strategic Focus

Cobalt is typically mined as a byproduct of copper extraction, a commodity CMOC remains optimistic about in the long term. The company’s 2025 copper production target ranges between 600,000 and 660,000 tonnes, slightly below last year’s record of 650,000 tonnes. This strategic focus on copper reflects its broader role in renewable energy and infrastructure development, sectors that continue to expand despite cobalt's current challenges.

Outlook for Cobalt and Battery Metals

The oversupply of cobalt poses a significant hurdle for the market, particularly as demand for EV batteries grows more slowly than anticipated. However, the long-term prospects for cobalt remain tied to advancements in battery technology and the transition to renewable energy.

CMOC’s aggressive production strategy will likely continue to influence market dynamics, shaping the trajectory of cobalt prices in the years to come. For investors and industry stakeholders, the focus will remain on balancing supply with evolving demand to stabilize the market.