There is a huge gap in the European market, and the price of battery raw materials is soaring

Foreign media reported that a report on battery metals issued by Aperio Intelligence on behalf of Eurobattery Minerals showed that the European electric vehicle industry has entered a period of rapid development. By 2025, the European electric vehicle industry's demand for raw materials and prices will increase significantly, which will be impossible to meet with local production.

The report shows that Europe produced about 750,000 electric vehicles in 2019, and the total production will increase to 4 million in 2025. Germany, France, Spain and Italy are expected to produce about 85% of electric vehicles in the entire European market.

Not only that, the European electric vehicle market saw sales increase by 137% in 2020 and 44% in 2019, with the Netherlands and Germany topping the list. According to EU production and consumption data forecasts, demand for copper alone for battery electric vehicles and plug-in hybrid vehicles and trucks will increase from about 52,000 tons in 2019 to 129,000 tons in 2025, while demand for cobalt will increase from 9,000 tons in 2019 to 51,600 tons in 2025.

However, the latest data shows that of the 20.4 million tons of copper produced globally in 2019, the EU accounted for only 13%, with a large portion of that produced in Poland, about 399,000 tons, followed by Spain, Bulgaria and Sweden. Similarly, the EU's nickel ore production accounts for a small part of global production, mainly concentrated in Finland and Greece. European cobalt production is mainly concentrated in Finland and Sweden. Data from 2018 shows that the EU contributed only 1,377 tons through Finland, accounting for 0.9% of the 156,483 tons of cobalt mined that year.

Overall, Europe imports 86% of the cobalt it needs, and according to the European Commission, demand will increase fivefold by 2030 and more than 15 times by 2050 compared to current supply levels.

The huge demand has caused the prices of these metal raw materials to soar. Among them, the price of cobalt is US$53,000 per ton (about RMB 343,000), which has risen by 65% ​​this year, and is about the highest point since December 2018. Previously, due to the global market oversupply, its price fell to US$25,000 (about RMB 160,000) in 2019.

Caspar Rawls, head of price assessment at Benchmark, said: "The price increase is mainly driven by real demand, due to the rapid growth in electric vehicle sales. The overall price trend is upward, although we may see some fluctuations." On the other hand, logistics problems caused by the epidemic in South Africa have also led to a shortage of cobalt. In addition, the Mutanda mine in the Democratic Republic of the Congo owned by top metal producer Glencore has been closed since 2019, and the output of artisanal mining has decreased, which has exacerbated the shortage of cobalt.

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