Looking at the reports as we have had from some of the dated reports on some of the most common lithium battery processors, cobalt sulphate in particular, we see that there has been a surge in the prices by some significant percentages over the recent past. Over the past year, the prices of cobalt sulphate, have been on the steady rise as have as well been marked by Benchmark Mineral Intelligence. This has been given the increase as well in the demand for the lithium battery that has well been seen in the industrial sector and manufacturing sector. It is in the Chinese market that we have seen such a significant increase in the prices of the cobalt sulphate with the prices averaging way over $13000 for every tonne of the material. The reasons given for the increase of the prices, there are a number of these reasons. Below are some of the reasons why you will see this stickiness in the rise of the prices of the cobalt sulphate as a material for the making of lithium battery.
Top of the reasons given for this is the fact that there has as well been a steady increase in the demand for the lithium ion battery cathode. One of the reasons that has seen this increase has been the increase in the demand for this product by the manufacturers for the lithium ion battery cathode which effectively has translated to explain the rise in the prices for the product. Going by statistical reports and records, the world market and demand for the cobalt sulphate, the largest share of the demand is taken by the lithium ion battery manufacturers. And as well going by the forecasts and projections that have been released by Benchmark Mineral Intelligence, this demand from this sector is even seen to be ever in the increase, or upward trend. And as a matter of fact, just to stress the significance, this is a subject that has been in the list of issues and topics for discussion in their past inaugural conferences.
One other reason that has been tendered to explain this trend and rise in the demand for this product has been that of the refining capacity that has been in a way limited by environmental restrictions. A number of the refiners in China have been quite a lot scrutiny and environmental checks from the Chinese authorities. Looking at the requirements, these have seen a number introduced such as the installation of measures to ensure that the effects and emissions from the process of manufacture do not endanger the environment. It goes without saying that all these installations will definitely come with costs that will in the end be passed by the manufacturers to the end users or the buyers in the tight margin market we operate and live in.
One more reason why this has been, the rise in the prices of the commodity, cobalt sulphate, has been the ending of the lower cost cobalt in the supply chain.