China’s CMOC Group, the world’s largest cobalt producer, expects supply pressures on cobalt to ease in the latter half of 2024.
The metal, crucial for batteries and alloys, has faced a slump as new production has outpaced demand, driving benchmark prices close to an eight-year low, according to Fastmarkets data.
CMOC, which recently announced record first-half profits, predicts that growth in global cobalt supply will moderate as new resources are unlikely to emerge soon.
“Global cobalt resources are concentrated, and after the current supply surge, new resources are expected to be scarce for some time,” CMOC stated. They anticipate that medium- and long-term prices will stabilize positively.
The Chinese mining giant, which has Contemporary Amperex Technology Co., the world’s largest battery maker, as a shareholder, reported a seven-fold increase in earnings to 5.4 billion yuan ($757 million) compared to the previous year.
CMOC doubled its first-half cobalt output to 54,024 tonnes by expanding two major mines in the Democratic Republic of Congo. The company surpassed Glencore last year to become the top cobalt producer.
CMOC also doubled its first-half copper production to 313,788 tonnes. The company expects prices to receive “strong support” from a recovering Chinese economy, a rebound in the property market, and a supportive monetary environment.
Additionally, growing demand driven by the energy transition, AI advancements, and power grid expansion will contribute to higher prices.
CMOC’s metals trading arm, IXM, reported a first-half profit of 664 million yuan on operating revenue of 93.9 billion yuan.
