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The article has a price sensitivity analysis for cobalt, which suggested that a doubling of cobalt prices would result in a meager 2.4% increase in battery pric

The article has a price sensitivity analysis for cobalt, which suggested that a doubling of cobalt prices would result in a meager 2.4% increase in battery prices. That cobalt price increase would open new mines, so I’m not too worried about that one. It’s a good article!

Scoundreller 8y ago
Does it assume equal distribution of cobalt supply? What I mean is, if demand goes up, but the cobalt suppliers are all on long-term contracts with manufacturers, could the manufacturers then drive up price since they control the essential inputs?
- marcosdumay 8y ago
  - There is more than one manufacturer currently on the market, so they can not drive up the prices unless they get into some risky collusion. - Doubling the price of a mineral does generally causes many new suppliers to appear.
  - Scoundreller 8y ago
    I’ll have to trademark “Lithium Producinf Exporting Countries” before they do. How is collusion risky? Seems worth trying. Restrict supply, jack up prices, maybe lose 20% of your sales by weight, but make it up with revenue.
    - benj111 8y ago
      You can get lithium from sea water. Cartels work for oil because nation states physically control it. You cant enforce a cartel where all non land locked countries can compete with you if they choose. And for businesses cartels are illegal in most of the largest markets so that won't work either.
      - Scoundreller 8y ago
        Just because you can, it doesn’t mean it’s economical even when the other source prices are inflated. Oil has lots of substitutes and alternatives too. OPEC’s members seem to have good enough business relations with the largest markets. I don’t see too many OPEC members getting arrested anywhere.
        woodandsteel 8y ago
        No, oil does not have lots of easy substitutes, not for its main uses.
        Scoundreller 8y ago
        Vegetable oils make an easy sub for diesel. Natural gas does for heating. Much easier to convert for those than the cost of switching from mined lithium vs sea lithium.
      - reaperducer 8y ago
        You can get lithium from sea water There's an ass-ton of lithium in certain parts of the American west. I've met some of the people working for the companies getting set up to exploit it once battery demand drives the price high enough.
    - marcosdumay 8y ago
      > How is collusion risky? The first player to defeat from a cartel can take most of the market for itself, right from the other colluding players.
zepearl 8y ago
Example of an new upcoming cobalt mine (USA, Idaho): https://www.ecobalt.com https://www.ecobalt.com Historical cobalt price charts: http://www.infomine.com/investment/metal-prices/cobalt/all/ http://www.infomine.com/investment/metal-prices/cobalt/all/

Scoundreller 8y ago

Does it assume equal distribution of cobalt supply? What I mean is, if demand goes up, but the cobalt suppliers are all on long-term contracts with manufacturers, could the manufacturers then drive up price since they control the essential inputs?

marcosdumay 8y ago
- There is more than one manufacturer currently on the market, so they can not drive up the prices unless they get into some risky collusion. - Doubling the price of a mineral does generally causes many new suppliers to appear.
- Scoundreller 8y ago
  I’ll have to trademark “Lithium Producinf Exporting Countries” before they do. How is collusion risky? Seems worth trying. Restrict supply, jack up prices, maybe lose 20% of your sales by weight, but make it up with revenue.
  - benj111 8y ago
    You can get lithium from sea water. Cartels work for oil because nation states physically control it. You cant enforce a cartel where all non land locked countries can compete with you if they choose. And for businesses cartels are illegal in most of the largest markets so that won't work either.
    - Scoundreller 8y ago
      Just because you can, it doesn’t mean it’s economical even when the other source prices are inflated. Oil has lots of substitutes and alternatives too. OPEC’s members seem to have good enough business relations with the largest markets. I don’t see too many OPEC members getting arrested anywhere.
      - woodandsteel 8y ago
        No, oil does not have lots of easy substitutes, not for its main uses.
        Scoundreller 8y ago
        Vegetable oils make an easy sub for diesel. Natural gas does for heating. Much easier to convert for those than the cost of switching from mined lithium vs sea lithium.
    - reaperducer 8y ago
      You can get lithium from sea water There's an ass-ton of lithium in certain parts of the American west. I've met some of the people working for the companies getting set up to exploit it once battery demand drives the price high enough.
  - marcosdumay 8y ago
    > How is collusion risky? The first player to defeat from a cartel can take most of the market for itself, right from the other colluding players.

zepearl 8y ago

Example of an new upcoming cobalt mine (USA, Idaho): https://www.ecobalt.com https://www.ecobalt.com Historical cobalt price charts: http://www.infomine.com/investment/metal-prices/cobalt/all/ http://www.infomine.com/investment/metal-prices/cobalt/all/