The Rising Influence of Rising Affluence

[DewDiligence]

Cobalt and lithium prices are now slumping:

https://www.wsj.com/articles/battery-metal-prices-fall-back-to-earth-fd6f04cb

After a substantial stretch when battery makers were desperate for mineral supplies, the shoe is suddenly on the other foot. In the past few months, previously red hot cobalt and lithium prices have cooled dramatically.

…Cobalt has fallen out of favor the most: prices in February were down 61% from January last year, according to Benchmark Mineral Intelligence. Lithium carbonate prices rose rapidly for most of last year, but the metal has seen a sharp correction of 21% since November.

China’s EV subsidy cut in December is a big factor: Chinese new energy vehicle sales represented 64% of global sales of such vehicles in 2022, according to S&P Global.

…For cobalt specifically, another factor is increasing preference for higher energy density, cheaper nickel-rich batteries—rather than cobalt-rich ones. With mainland China’s new energy vehicle sales tax exemptions ending last year, EVs using more expensive cobalt heavy batteries are a tougher sell.