6 Cobalt Stocks To Watch Amid Reports Apple Is In The Market To Buy The Metal Directly

Apple Inc. AAPL has a track record of cutting out the middleman and taking control of its supply chain, and Bloomberg reports that Apple is now in talks to buy cobalt directly from miners. 

Fears over a potential cobalt shortage driven by increasing battery demand from electric vehicles has prompted Apple to shop around for a direct source of cobalt, according to Bloomberg. Apple needs cobalt for its device batteries, including iPhone and iPad batteries.

Roughly 25 percent of the global cobalt demand currently comes from smartphones, but analysts predict that demand for cobalt will increase exponentially once battery-powered cars become mainstream. Darton Commodities estimates global cobalt demand will rise from 55,400 tons in 2017 to more than 324,000 tons by 2030. The typical lithium-ion smartphone battery requires about 8 grams of cobalt, whereas an electric car battery requires about 8 kilograms of cobalt.

Demand for cobalt from device makers and auto companies has driven the price of the metal higher by more than 200 percent in the past 18 months. To complicate the matter, roughly two-thirds of the global supply of cobalt comes from the politically unstable Democratic Republic of the Congo.

Apple is reportedly in talks to secure a long-term deal for cobalt spanning at least five years. The news sent shares of Glencore International PLC, St. Helier GLCNF, which primarily trades on the London exchange, higher by more than 5 percent Wednesday. Here’s a look at how other cobalt producers reacted: 

• BHP Billiton Limited (ADR) BHP was up 0.4 percent.
• Vale SA (ADR) VALE was down 0.8 percent.
• Freeport-McMoRan Inc FCX was up 1.7 percent.
• CHINA MOLYBDENUM C CMCLF was up 3.6 percent.
• KATANGA MINING LTD KATFF was up 8.4 percent.

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Photo courtesy of Apple.