CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Scan to Download iOS&Android APP

Cobalt futures price: EV demand surge ensures bright long-term forecasts but short-term questions remain

By  Yoke Wong

Edited by Jekaterina Drozdovica

17:35, 21 November 2022

By  Yoke Wong

Edited by Jekaterina Drozdovica

17:35, 21 November 2022

Share this article

Subscribe to Weekly Highlights

The major market events for the week ahead right in your inbox. Subscribe
cobalt stone on isolated white background. Industrial ore used in construction and medicine.
Cobalt futures may suffer in the short-term amid falling demand in China. Photo: RHJPhtotos / Shutterstock

US cobalt futures price fell to a 16-month low over the past month as the looming global recession reduces demand for the metal used in batteries. Yet, the increased adoption of electric vehicles may support prices in the long term. 

The November contract for standard grade cobalt traded in the Chicago Mercantile Exchange (CME) settled at $22.99 per pound (lb) on 18 November 2022, the lowest since July 2021 and down 11.6% compared to a month ago.

So how do cobalt futures work and what’s next for the silvery metal? Here we take a look at the factors that are shaping cobalt futures price prediction and market outlook. 

What are cobalt futures?

Cobalt futures are derivative contracts with standard grade cobalt as the underlying assets.  The metal is a key material in nickel-manganese-cobalt (NMC) batteries, which are used to power a wide range of products from consumer electronics to electric vehicles. 

The contracts can be traded on exchanges such as the London Metal Exchange (LME) and the CME. Those cobalt futures traded on the CME are based on the price reporting agency FastMarkets’ indices on an in-warehouse Rotterdam basis. The contracts are denominated in US dollars and cents per pound. 

According to the CME specification, the grade of cobalt must be at least 99.8% pure. The contracts are listed monthly for the current year and the next three calendar years.

The FastMarkets-settled cobalt futures contracts on the CME were launched in December 2020 amid increased market demand for hedging and risk-management for the metal. 

Recession weighs on global cobalt metal demand outlook

Cobalt futures price has been falling since the second quarter of 2022, as growing recession fears dampened consumer demand for electronic goods. The rising global inflation has also cut consumer spending power, reducing overall demand for electronic goods. 

In the first quarter this year, pent-up consumer demand for electronic goods and vehicles post-Covid were pushing cobalt futures prices higher. According to CME cobalt futures history data, the metal price peaked at just under $40/lb in late April before falling in the subsequent months. 

The cobalt futures price peak in April this year remained below the 10-year high of $45/lb in 2018. The metal prices have been volatile over the past five years, falling as low as $12/lb in 2019. 

Cobalt futures prices, 2020 - 2022

In addition to the macroeconomic impact brought about by recession and inflation, the zero-Covid policy implemented by China, the world largest metal consumer, has also cut demand for cobalt. 


23.34 Price
+0.030% 1D Chg, %
Long position overnight fee -0.0088%
Short position overnight fee 0.0006%
Overnight fee time 21:00 (UTC)
Spread 0.020

Natural Gas

2.20 Price
+1.440% 1D Chg, %
Long position overnight fee -0.3950%
Short position overnight fee 0.3731%
Overnight fee time 21:00 (UTC)
Spread 0.006

Oil - Crude

72.94 Price
-1.030% 1D Chg, %
Long position overnight fee -0.0162%
Short position overnight fee -0.0057%
Overnight fee time 21:00 (UTC)
Spread 0.03

Oil - Brent

77.41 Price
-1.280% 1D Chg, %
Long position overnight fee 0.0123%
Short position overnight fee -0.0342%
Overnight fee time 21:00 (UTC)
Spread 0.04

The stiff lockdown measures imposed across China since March 2022 have significantly slowed manufacturing activities in the country, causing a sharp decline in its economic growth. 

With signs of China easing its zero-Covid policy, the outlook for the cobalt futures market has improved over the past two weeks, but concerns over the slowing global economy remained.

According to the Cobalt Institute, there are risks to the demand outlook for cobalt in the short term. In their third-quarter update, the institute said: 

“Weaker household real incomes and lower consumer confidence will continue to affect portable electronics demand.”

The agency pointed out that supply disruption in Russia, the world’s second largest producer, could cause regional supply tightness, noting: 

“More trading restrictions or sanctions placed on Russian cobalt [are] limiting regional metal supply.”

According to Statista, the world's largest cobalt mine producer in 2021 was the Democratic Republic of Congo (DRC), with 120,000 metric tonnes output, followed by Russia at 7,600 tonnes and Australia at 5,600 tonnes. 

Despite the negative short-term outlook, the increased adoption of electric vehicles (EV) globally could support cobalt prices in the longer term, said the Cobalt Institute:

“Greater and faster EV adoption globally will put increased strain on cobalt sulphate availability, [and] accelerated energy transition will require more cobalt in areas such as power generation and energy storage,” said the Cobalt Institute. 

Cobalt futures forecast for 2023 and beyond

As a result of the geopolitical uncertainty and looming recession, analysts were mixed on the cobalt futures price in the short term. 

The Cobalt Institute believed the overall commodity prices will fall because of the looming global recession, but did not give any price indication. 

In contrast, economic data provider Trading Economics, as of 21 November, expected the average cobalt prices to rise to $50,973.05/tonne ($23.12/lb) by the end of the fourth quarter, falling to $48,136.31 ($21.83/lb) in 12 months’ time. 

Note that price predictions can be wrong and shouldn’t be used as a substitute for your own research. Always conduct your own due diligence, looking at the latest cobalt futures news, a wide range of commentary, technical and fundamental analysis. Remember, past performance does not guarantee future returns and never trade more money than you can afford to lose.


How are cobalt futures priced?

Cobalt futures traded on the CME are priced by transactions in the physical market, which are based on indices published by price reporting agency FastMarkets.

Will cobalt prices go up or down?

Nobody can say for sure whether cobalt prices will go up or down in 2023. The market is volatile, and price movements could depend on supply and demand.

How to invest in cobalt futures

You can invest in cobalt futures through brokers registered to trade on futures exchanges. Retail investors may also gain exposure through investing in stocks of listed cobalt producers and miners. Note that investing in cobalt contains risk, and whether cobalt is an appropriate investment for you depends on your risk tolerance, experience in the markets and overall strategy. Never risk more money than you can afford to lose.

Related reading

Rate this article

Share this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Latest Commodities news

Still looking for a broker you can trust?

Join the 500.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading