Cobalt Demand Expected to Rise due to 5G
5G technology will significantly boost demand for cobalt in the years to come. There would be a need for larger rechargeable batteries and more energy storage. This can potentially pit the sector against electric vehicle makers.
5G phones need larger batteries that use lithium cobalt oxide chemistry (LCO). This is because the antenna that’s used to transmit and receive radio waves need more power than those in 4G.
Also needing more power is 5G’s base station antenna. This is putting pressure on power grids, requiring the use of energy storage systems. In China, these are now being built with cobalt containing lithium-ion batteries.
China’s 5G sales have slowed in recent months. But sales should increase as growth recovers from the virus crisis.
In commodity news, CRU analyst George Heppel said, 5G will be a major source of cobalt demand in the years ahead. It expects cobalt demand for portable devices to rise to 73,000 tonnes by 2025 from 45,000 tonnes this year.
Heppel said, down the road, they’re likely to see some aggressive bidding for cobalt from electric vehicles and mobile phones. This is where there isn’t really a chemistry that can compete with LCO, he added.
Electric Vehicles
These vehicles typically use cathodes made from nickel, cobalt and manganese. Though there are alternatives such as lithium iron phosphate that do not need cobalt.
Estimates for cobalt demand mostly vary between 100,000 and 130,000 tonnes this year. It is doubling to between 200,000 and 260,000 tonnes in 2025.
A balanced cobalt market in 2020 and deficits from 2022 are expected as sales of electric vehicles and 5G phones accelerate.
The global transition to 5G technology is gathering pace and growth in non-EV markets has significant potential to expand. That is across two fronts: portables and energy storage systems, analysts at Benchmark Mineral Intelligence said in a note.
They also said that demand growth for energy storage systems has overtaken electric vehicles though starting from a lower base. Benchmark forecasts stationary storage demand to grow by 35% per annum through the 2020s, the commodities experts added.
