Tesla Sees Battery Supplies Falling as
Cobalt Feels the Blues

Thursday, May 9, 2019

Tesla’s manager for battery metals supplies, Sarah Maryssael, has stated there are emerging shortages in supplies of key metals including cobalt, graphite, lithium and nickel due to historic under-investment in mines, Bloomberg reports. That may be a longer-term view given the lithium supply chain appears oversupplied for now, as outlined in Panjiva’s research of Apr. 29.

Market prices tell very different stories for the metals with cobalt having dropped year-to-date by 41.2% on the basis of the three month average to May 8, while nickel has increased by 12.8%, according to S&P Global Market Intelligence data.

COBALT’S COLLAPSED

Chart shows U.S. prices for cobalt and nickel on a monthly and three-month average basis.

Calculations based on S&P Global Market Intelligence data.Source: Panjiva

The collapse in cobalt prices has come amid a reduction in demand from the U.S. – where Tesla’s battery factory is based – which saw a 4.8% year over year drop in imports in the three months to Feb. 28, Panjiva datashows. That followed an increase of just 0.4% year over year in the prior nine months.

There’s also been a consolidation in supplies – imports from the EU increased 6.8% year over year in the three months to Feb. 28 – with the top four providers, including the EU, Norway, Canada and China, represented 65.3% of supplies in the 12 months to Feb. 28 from 60.0% a year earlier.

A recovery in demand, a shortfall in supply as predicted by Tesla or a further consolidation of supply could help leading shippers by sea to the U.S. including miner Freeport McMoRan and metals trader Mitsui.

LESS DEMAND FOR COBALT, FROM OUTSIDE EUROPE AND CANADA

Chart segments U.S. imports of cobalt ore and products by origin on a monthly and three-month average basis.Source: Panjiva

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Tesla Sees Battery Supplies Falling asCobalt Feels the Blues

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Tesla Sees Battery Supplies Falling as
Cobalt Feels the Blues

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