Glencore Halts Cobalt Stockpiling as Surplus Market Predicted for 18-20 Months
Glencore has ceased stockpiling electric vehicle (EV) battery material cobalt, according to CEO Gary Nagle, who stated on Wednesday that the market is likely to remain in surplus for another 18 to 20 months.
In August 2023, the London-listed miner announced that it had stockpiled cobalt in the first half of the year, reducing supplies to the market to support prices. However, the company did not disclose the quantity of cobalt stockpiled, and Nagle declined to comment on current stock levels.
Increased production in the Democratic Republic of Congo (DRC), the world’s top cobalt producer, has led to large surpluses, pushing cobalt prices down to approximately $12 per pound, the lowest since 2016.
“Our best guess now is that it will probably take 18 to 24 months to work through this surplus,” Nagle noted during a briefing, adding that demand from the aerospace and defense sectors remains robust. “We’re not really stockpiling anymore; in fact, we’ve actually sold down a bit of our stocks.”
China’s CMOC Group is significantly ramping up cobalt production at its Congolese mines, forecasting an output of about 100,000 tons by 2028. According to Darton Commodities, the DRC accounted for 77% of global cobalt supplies, exceeding 170,000 tons last year.
Analysts at Macquarie predict that the cobalt market could remain in surplus by approximately 28,000 tons in 2024 and 24,000 tons in 2025.
Nagle emphasized that the current situation should be viewed as a short-term mismatch rather than a structural change in the market, stating, “There isn’t another big copper-cobalt mine coming online, which gives the market a chance to rebalance.”
However, he cautioned that cobalt prices are unlikely to reach the highs seen in 2018 and 2022, as demand from the electric vehicle sector is expected to decline due to emerging battery technologies that exclude cobalt.
