The cobalt market is grappling with a significant oversupply, driven by unprecedented production levels, as demand for electric vehicle (EV) batteries grows more slowly than anticipated.
While the market faces short-term challenges, the long-term outlook for cobalt remains closely tied to advances in battery technology and the global transition to renewable energy.
Cobalt prices have dropped to their lowest levels since 2016, largely due to an oversupplied market and weak demand growth.
As the global supply chain struggles with excess inventory, prices have seen a dramatic decline, underscoring the difficulties the industry faces in balancing production with demand.
China’s CMOC Group, the world’s largest cobalt miner, has played a major role in the surge of cobalt supply. In 2024, CMOC reached a new production milestone of 114,165 tonnes and has set its sights on maintaining similar output levels through 2025.
According to the company’s latest production guidance, output is expected to remain between 100,000 and 120,000 tonnes annually through 2025.
Notably, CMOC exceeded its 2024 full-year production forecast within just nine months, thanks to the ramp-up of operations at two major African mines, further cementing its dominance in the global cobalt market.
As of January 23, 2025, cobalt spot prices were trading at $11.02 per pound, reflecting a significant decline from previous years.
This sharp drop in prices highlights the challenges facing the cobalt industry, especially as demand for cobalt in EV batteries lags behind projections.
Cobalt is typically mined as a byproduct of copper extraction, and CMOC continues to focus on copper as a key component of its strategy.
The company’s copper production target for 2025 ranges from 600,000 to 660,000 tonnes, slightly below the 650,000 tonnes achieved in 2024.
This focus on copper aligns with broader trends in renewable energy and infrastructure development, sectors that remain robust despite the current struggles in the cobalt market
While the cobalt market faces challenges from oversupply and slow EV battery demand growth, its long-term prospects are closely linked to technological advances in batteries and the growing renewable energy sector.
CMOC’s aggressive production strategy is likely to continue influencing market dynamics and shaping cobalt prices in the coming years.
Investors and industry stakeholders will need to focus on balancing supply with evolving demand to stabilize the market and ensure sustainable growth.
