Tuesday, February 21, 2017

Cobalt price now above $20 per pound

Business Insider:

Investors are buying up physical cobalt in anticipation that shortages of the metal, a key component of lithium-ion batteries used in electrical cars, will spur prices to their highest levels since the 2008 financial crisis.

Prices for cobalt metal have climbed nearly 50% since September to five-year peaks around $19 a pound as stricter emissions controls boost demand for electric vehicles, especially in China, struggling with ruinous pollution levels in some cities.

The article referenced above is a week old and the price of cobalt is already over $20 per pound. The price looks like it is going parabolic. There is definitely going to be a short term price spike as electric vehicle batteries suck up demand for cobalt used in their batteries.

Eventually enough investment will come in to solve the supply issue and/or battery chemistry will change in order to find an element that is in better supply.

Not sure how this will resolve but one thing I can be sure of is that every stock promoter in Vancouver and Toronto will supply a never ending supply of cobalt stocks to unsuspecting investors. Buyer beware.

I am playing this with long term puts on Tesla. The cobalt shortage is just one of their many problems.

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