Global Trends of Growing Demands for Cobalt in 2023

The primary mineral behind lithium-ion batteries used in laptops, electric vehicles, and smartphones is Cobalt. It is vital to the highest energy density and for boosting battery life. World's highest cobalt resources are found in the Katanga region in the south of the Democratic Republic of Congo. Here, more than 70 percent of current cobalt production worldwide takes place.

In 2023, demand for Cobalt in the EV industry is expected to increase. Reports say that lithium-iron-phosphate (LFP) cathode technology may hinder this increase in demand. But the current scenario of EV penetration rate means growing demand for Cobalt. The reports also added that the EV market is growing more than enough to offset decreasing volumes of Cobalt in cathodes.

As it is, known mineral extraction is the backbone of the Congolese economy. Cobalt is a by-product of copper and accounts for 85 percent of the country's economy. Due to the vast mineral deposits, it is the only sourcing option for the companies there.

According to Hughes of Benchmark Mineral Intelligence, "due to increased supply from Indonesia and DRC in 2023 along with less demand from the consumer electronics industry, the market is expected to be seen in a sizable surplus next year."

Benchmark Mineral Intelligence also expects cobalt prices to fall in early 2023. The prices have already beat the expectations in 2021, growing on the demand from the EV space. It also said that the cobalt market aligned with the expectations in 2022. But when we look into the demand sectors, the usage by the consumer electronics market was finite in 2022.

Again, the reports of performance in the last few years show that cobalt consumption increased by 8 percent per year from 2013 to 2021. But, in 2019 and 2020, it slowed down a bit due to the pandemic. The firms expect a mine supply to increase by 11 percent yearly through 2027 to equate with the growth.