Chart of the week: cobalt’s rise will level out

published 12 January 2018

Cobalt left other industrial metals "in the dust" in 2017, says Mark Burton on Bloomberg. Prices jumped from $30,000 a tonne to $75,000; they have tripled in two years. The surge is due mainly to the electric-car boom, as cobalt is a key ingredient in the batteries required to power them.

It may be a bit late for investors to jump on this bandwagon, however. Demand continues to soar, with orders in China up 51% year-on-year in the first 11 months of 2017. But new supply is finally coming on stream now that Glencore and Eurasian Resources are boosting production. Prices look set to "level out" in 2018.

Viewpoint

"Behavioural economists chalked up a small victory this week. MPs recommended a so-called latte levy of 25p on non-recyclable disposable coffee cups after discovering the power of loss aversion. Consumers are far more likely to change their behaviour and bring their own cup...to the coffee shop when confronted with a 25p surcharge than when offered a 25p discount. Irrationally, consumers get more satisfaction from not losing a pound than from gaining a pound. A tax, therefore, is likely to be highly effective It's one of the reasons that the plastic-bag tax has been so successful in slashing demand for carrier bags."