If you’re wondering how to invest in cobalt futures, you may do so under the London Metal Exchange under the ticker CO. Cobalt futures began trading in 2010 and are quoted in US dollars per tonne. You’ll find contracts that range over 15 months, which will allow you to make bets over different periods. Cobalt isn’t usually exclusively mined, as it is acquired in conjunction with another metal.
Expectations for upstream companies
As more automakers electrify their vehicles, the demand for cobalt should rise. For investors in the U.S., note that Glencore is not listed on a U.S. stock exchange. Shares can be purchased over the counter as an ADR (which represents the stock of a foreign company).
Glencore
The value of the asset or portfolio depends on the value of the traded ETF. As such, they are a great way for investors to gain exposure to investment vehicles, as they are not limited to traditional common stocks when they can be traded. It focuses on the mining industry’s base metals, ferrous metals, and coal segments.
Invest in Cobalt Exchange-Traded Funds
This means most of the companies listed below don’t deal exclusively in cobalt. From 219,679 tonnes by 2023, this will grow to 276,401 by 2028 at full battery how to short dogecoin capacity. The general opinion seems that cobalt’s current supply and demand dynamics will push the material into a deficit in the next couple of years. In 2019, the DRC produced the most cobalt at around 100,000 metric tons.
Do note that buying cobalt futures may be much riskier than dabbling in stocks and ETFs, as you are directly exposed to the material’s price movements. Cobalt investment stock offers more safety with more people behind them, increasing the shareholder’s wealth. If you’re confident about cobalt’s price spike, futures are your best bet. The price of cobalt has been incredibly volatile with prices continuing to fall year after year. Despite what would seem like a dismal investment, experts in the industry believe that the metal would soon pick up.
America has fallen behind China tremendously when it comes to EVs, and cobalt is vital in EV production. NIO, a Chinese EV company, is expected to be one of Tesla’s biggest rivals for the foreseeable future. Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen. These companies make the building blocks of everything we use and consume.
- Much energy is needed to dig into Earth’s crust to obtain the metal.
- Many DRC cobalt operations are dangerous, poorly managed and involve child labor, and these human rights groups believe end users should be sourcing the metal elsewhere.
- Civil unrest and political instability have the potential to affect supply chains, and there is no guarantee of the security of cobalt operators.
- Selling 75% of the cobalt production from its Canadian Voisey Bay mine to the other two companies to bring in $690 million to fund 40% of the mine’s expansion.
- Prices can fluctuate wildly; supply and demand change from month to month and year to year.
- Regardless, such a solution is still years away from mass production, and industry experts believe that electric vehicle manufacturers will still continue to rely on cobalt.
Common mistakes to avoid when investing in cobalt ETFs
If you’re interested in a more direct investment in mining stocks, the iShares MSCI Global Metals & Mining Producers ETF is a top choice. Its portfolio consisted of 265 global mining stocks as of mid-2024. Although not directly involved in the production of base materials like cobalt, Wheaton harbors a valuable niche in the global mining space. It’s also very profitable and pays a dividend for investors looking for some investment income. Freeport-McMoRan is another global mining and energy company and is based in Arizona. Freeport-McMoRan is one of the largest producers of copper, which is used throughout the global economy.
Cobalt is a hard and lustrous metal and commodity found only in chemically combined form. Like lithium, it plays an integral role in the production of rechargeable batteries for electric vehicles (EVs), renewable energy storage, and consumer electronics. Conveniently, cobalt is usually a byproduct of mining for back-end web architecture other renewable energy-related metals, like copper. As the world hastens the transition towards green energy, the demand for cobalt shows significant growth potential.
In fact, Glencore is one of the world’s top producers of cobalt, primarily as a byproduct from its copper mines in the Democratic Republic of Congo. skrill cryptocurrency risk statement Many mining companies extract cobalt for commercial purposes, though few focus specifically on the metal. That can make it hard for investors to choose the best one to take advantage of the potential growth in cobalt demand to support EVs. Investors might want to consider taking a broader approach by investing in an exchange-traded fund (ETF) with exposure to the cobalt sector.
The fund holds over 110 stocks and aims to track the performance of the MSCI US Investable Market Materials 25/50 Index. Trading cobalt physically might not be the best option for most as it entails numerous issues with effort, transport, and security. Fortunately, investors interested in cobalt can use financial instruments such as cobalt exchange-traded funds (ETFs) to speculate on the prices of the resource without owning the resource. One is for lithium-ion batteries, especially ones in EVs (electric vehicles).