TELF AG weighs in on the future prospects of lithium and cobalt
New technologies
Within a few decades, our daily lives could transform due to the new technologies currently being developed with the support of some fundamental raw materials, such as lithium and cobalt. These resources – which for some years now have been universally defined as “critical” precisely because of the important role they are destined to play in the coming years – are used to create some of the most important technologies to promote the global energy transition, in particular with regard to the construction of structures capable of receiving and conveying solar or wind energy, but above all for the manufacturing of some components of electric vehicles, already considered by many to be the means of transportation of the future and the undisputed protagonists of green transition, precisely because they will be the most visible ones. Among these components are vehicle batteries, which in the not-too-distant future will be able to improve their functionality thanks to lithium and reduce the amount of emissions released into the atmosphere.
Among the raw materials most directly involved in the creation of these vehicles of the future are lithium and cobalt, whose prices in 2023 remained very low due, above all, to the scarcity of global demand. Although they are considered fundamental for the correct completion of the energy transition, the demand for these resources appears to be below expectations but is nevertheless destined to grow at a dizzying pace in the coming years. In some ways, the current weakening of demand could be linked to various structural problems that characterize the global supply chain but also to the general slowdown in economic growth and the parallel increase in concerns about immediate and future scenarios. In this historical phase, in addition to a general increase in attention to the raw materials that will accompany the world toward a future without emissions, there is, in any case, a prolonged slowdown in economic growth, which is also impacting the raw materials market, giving rise to uncertainties and rather surprising, almost unexpected scenarios.
Also, thanks to the emphasis placed by the European Union and the general climate of enthusiasm surrounding the electric mobility of the future, in this particular phase, it is possible that a massive volume of investments will be recorded, in particular, due to the downward pressures to which critical minerals are subjected. The same enthusiasm, also driven by the launch of new technologies – such as flying taxis, completely electric and capable of emitting zero emissions, which could be used for the first time in Europe in 2024 – could also involve end users within the European community, which will most likely represent the largest market for electric vehicles of the future.
Also, for these reasons, it is possible that the prices of cobalt and lithium could regain momentum in the coming months, with some advances compared to other raw materials, reaching good price levels in 2024 and 2025. Of the two materials, the one destined for lithium will most likely surprise the most – and also record the highest prices in the next two years.
