Given the wide-range of usage of cobalt in the industrial world, it is difficult to categorize just exactly what kind of metal cobalt is. Some consider it an industrial metal, while others see it as a rare earth/strategic metal.
As a good majority of cobalt is used for superalloys, its application can be found in things such as aircraft engines, submarines, turbines, chemistry equipment, and space vehicles. This is because superalloys are very strong and incredibly resistant to high-heat, corrosion, and oxidation. Cobalt can also be used in things such as batteries, magnets, pigmentation, orthopedic implants, and even gamma rays. Most recently, cobalt has been rising in popularity due to its presence in making lithium-ion batteries last longer.
Region wise, Asia is dominating the production of cobalt, accounting for almost half of the world’s supply of cobalt. Both Europe and the Americas each account for under a quarter of production of the supply.
Because of the recent rise in demand in cobalt, investors have taken to investing in cobalt. While the trading of cobalt can be used for hedging, traditional investors thinking of cobalt investment can find it a useful play when it comes to macroeconomic factors as well as the behavior of the global economy. There are two ways one can invest in cobalt: through cobalt futures and/or cobalt stocks.
Cobalt Futures
Cobalt futures can be found on the London Metal Exchange. Contracts can range over a span of 15 months and are quoted in U.S. dollars per ton. Trading of cobalt futures began in early 2010.
Cobalt Stocks
If you are an investor in the U.S who wants to invest in cobalt, you might find it a bit hard to find cobalt stocks. Those interested in investing in cobalt should consider getting into the foreign stock market. A good exchange for cobalt stocks to look into is Canada, where some well-known metal companies such as Formation Metals ($FCO) and Puget Ventures ($PVS) participate in the production of cobalt.
Featured image: mining-technology.com
