It’s a tiny fund with minimal assets under management, making it very risky. However, it’s the first ETF to only invest in companies mining metals for batteries. “Falling cobalt prices may lead OEMs in certain markets to reconsider lower nickel NCM batteries, with higher cobalt content, due to the potential cost savings,” notes Fastmarkets in its report. Fastmarkets analysts are “forecasting an ongoing and widening surplus in the global cobalt market in 2024”.
Pros and cons of investing in cobalt ETFs
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This brief guide covers supply, demand and different investing options for this battery metal. By exploring these investment options, investors can tap into the potential of the cobalt market while managing risk and diversifying their portfolios. ‘Falling cobalt prices may lead OEMs in certain markets to reconsider lower nickel NCM batteries, with higher cobalt content, due to the potential cost savings,’ notes Fastmarkets in its report. Fastmarkets analysts are ‘forecasting an ongoing and widening surplus in the global cobalt market in 2024’. Since cobalt is such a vital part of many new technologies, there is plenty of potential for growth with this precious metal.
Market Position and Competitive Advantage
With double-digit profit margins and a market cap exceeding US$150 billion, BHP’s financial strength is unmatched. Its 2021 partnership with KoBold Metals, backed by tech titans like Bill Gates, leverages AI to explore cobalt and nickel deposits, signaling innovation and growth potential. While cobalt is a byproduct, BHP’s scale and strategic focus on battery metals make it a compelling pick for 2025. By investing in these ETFs, investors can gain exposure to cobalt indirectly through diversified portfolios of mining stocks and base materials.
Best United States Cobalt Stock?
Short-term investments can capitalize on price swings from supply disruptions or policy shifts, suiting agile firms like CMOC. Cobalt stocks carry inherent risks—price swings, geopolitical instability—so diversification is key. Pairing cobalt giants (e.g., Vale) with streaming existential threat of coronavirus to hospitality outlined by trade association ukh firms (e.g., Wheaton) spreads exposure.
- Instead, working with a financial advisor can provide valuable guidance in evaluating asset allocations and exploring potential investment avenues in cobalt.
- By exploring these investment options, investors can tap into the potential of the cobalt market while managing risk and diversifying their portfolios.
- Glencore remains the world’s largest cobalt producer, outputting over 25,000 metric tons annually from its DRC operations, including the Katanga and Mutanda mines.
- This company’s growth potential is precisely why it’s on our list of the top cobalt stocks.
- Meanwhile, demand from the EV sector remains robust, buoyed by record-breaking global sales in 2024, particularly in China and Europe.
- This means that its stock’s value is only partially tied to cobalt prices.
Consider investing in more ETFs
Katanga is very rich in precious metals, particularly copper and cobalt. Fortune Minerals is another Canadian cobalt stock with investment potential. This means that its stock’s value is only partially tied to cobalt prices. Long-term investments align with cobalt’s structural demand growth (e.g., a projected 16% supply shortfall by 2035), favoring companies like Glencore or BHP.
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The Amplify Lithium & Battery Technology ETF also isn’t a direct investment in cobalt. The fund focuses more on battery technology, which is a key driver of cobalt demand. However, more recently, demand from high-tech sectors has overshadowed traditional cobalt uses. Today, this critical metal is an essential ingredient in electric vehicle (EV) batteries, energy storage systems, metal alloys and more. One of the key factors driving the cobalt market is its increasing demand in the production of lithium-ion batteries, particularly for electric vehicles and portable electronics.
Best Long-Term ETFs to Invest In
The company uses eco-friendly business practices, and it has a diverse portfolio. The company also announced the expansion of its Moa JV with its Cuban partners, which are expected to produce 15 to 20% more finished nickel and cobalt per year. If this pivotal move becomes successful, it could be a huge boon to the company and its investors. Starting in Q4 2022, Electra Battery Materials is developing an authorized hydrometallurgical refinery north of Toronto to manufacture 5,000 tons of cobalt. The company used to focus entirely on cobalt production and refinement.
- By investing in these ETFs, investors can gain exposure to cobalt indirectly through diversified portfolios of mining stocks and base materials.
- Cobalt Blue is smaller than many of the other operations on this list.
- Although it’s not a pure play on cobalt, this ETF is lower risk because it offers broader exposure to the entire materials sector.
- Its financial stability (2024 EBITDA over US$11 billion) and partnerships, like with Electra Battery Materials, position it well for 2025, despite ethical sourcing risks.
- Tech stocks are highly speculative, especially if we’re talking about EVs.
- Supply constraints could emerge if demand outpaces production or if ethical sourcing pressures tighten availability, potentially pushing prices higher despite the current surplus.
- Just recently, this cobalt mining company reported promising results from its 2021 drill program.
A company’s financial health is paramount when selecting cobalt stocks. Consistent profitability, strong balance sheets, and manageable debt levels indicate resilience against market volatility. The DRC’s dominance introduces geopolitical risk, with 84% of production concentrated in a single country prone to instability and ethical concerns like child labor in artisanal mining.
Efforts to diversify supply—such as Indonesia’s expansion and emerging projects in Canada and Australia—offer alternatives, but the DRC’s scale keeps it central in the near term. Supply constraints could emerge if demand outpaces production or if ethical sourcing pressures tighten availability, potentially pushing prices higher despite the current surplus. The Democratic Republic of Congo (DRC), which produces over 70% of the world’s cobalt, continues to dominate supply, while Indonesia’s rapid production growth adds further pressure. Meanwhile, demand from the EV sector remains robust, buoyed by record-breaking global sales in 2024, particularly in China and Europe. This ETF consists of more than 250 mining stocks, including prominent companies like Glencore and BHP Group, which obtains cobalt from its copper- and nickel-refining processes.
Innovations in recycling and alternative battery technologies might also create new investment opportunities. For ideas on cobalt stocks to invest in, check out our list of the biggest producers of the metal — these are some of the largest names in the sector. You can also read our overview of Canadian cobalt companies that how to buy shinja have seen year-to-date gains, and our list of the biggest cobalt stocks on the ASX by market cap. Also, many companies produce cobalt as a byproduct, so you may need to invest in a copper or nickel mine to invest in cobalt.
In addition, the company has been experimenting with black mass feeds made from recovered batteries. One bets of cryptocurrency boxing no kyc bets of crypto handball payout of the best reasons to invest in Carpenter Technology is its diverse portfolio of products. Glencore stock has been on a solid upward trajectory for the past year. However, many analysts think it could go up even higher — but predictions aren’t promises, so take this with a grain of salt. Given that the estimated market value of cobalt is currently at $8.4 billion, FTMDF continues to be one of the front-runners in this industry. Wheaton Precious Metals stock has been solid this year, a great start earning $305 million in revenue and $210 million in cash flow during the first quarter.
If you’re interested in a more direct investment in mining stocks, the iShares MSCI Global Metals & Mining Producers ETF is a top choice. Direct investment in commodities like cobalt can be challenging and risky for retail investors due to the unpredictable nature of commodity markets. Instead, working with a financial advisor can provide valuable guidance in evaluating asset allocations and exploring potential investment avenues in cobalt.
After it is fully operational in 2027, the $5.5 billion, 45 GWh factory should be able to create battery packs for approximately 450,000 electric vehicles each year. However, the company just sold its Ernest Henry Copper mine for $574 million and completed the acquisition of Cerrejon in Colombia. This closure could potentially cause a slight decrease in production, as the Ernest Henry mine produced 44,770 tons of its output last year.
Then, Wheaton Precious Metals distributes cobalt to technology companies around the world. This is a much more stable business model than investing with the miners directly. It recently entered the cobalt market, but it also works with silver, gold, and palladium. In 2024, China led a 40.7% surge in EV and hybrid adoption, supported by aggressive pricing and subsidies, while Europe saw a rebound with stricter emissions regulations on the horizon for 2025.