ERG warns of possible cobalt supply crunch
At current cobalt prices, 20% to 30% of global mine supply is at risk of "disappearing" in 2020, warns diversified natural resources group Eurasian Resources Group (ERG) CEO Benedikt Sobotka.
He points out that cobalt prices had declined significantly from January to early August this year, compared with 2018, during which prices averaged more than $35/lb.
While cobalt prices have been on the rise again since, as a result of supply cuts by some miners, prices are still too low to prevent a deficit in the market.
Sobotka says some cobalt projects will ramp-up output in 2020, but notes that this will not be enough to close the gap.
Further, he expects existing stockpiles to "fall to critical levels over the course of 2020".
"To regain lost supply in the short term, a sustained price in excess of $15/lb is needed.
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