LONDON, Aug 8 (Reuters) - Glencore stockpiled cobalt in the first half of the year, cutting supplies to the market to support prices of the electric vehicle battery material, the London-listed miner's CEO Gary Nagle said on Tuesday.
Nagle said the world's largest cobalt-producing company would also consider reducing production and adding to its stockpiles of the material that is used to make alloys for the aerospace industry as well as in batteries.
Cobalt prices at $17 a lb are down more than 50% from October, due to weak demand and growing supplies from Indonesia, the world's second largest producing country. Democratic Republic of Congo, where Glencore's cobalt production is concentrated, is the largest.
"There is still a surplus in the market," Nagle told analysts in a call after the company's half-year results.
"Taking action is something we have done before and it is something we will consider in the future...(It) could be lower production or stockpiling for a period of time or a combination."
Glencore supplied 43,800 tonnes of cobalt in 2022 and 21,700 tonnes in the first half of this year.
According to data from Darton Commodities, Glencore accounted for 23% of global mined cobalt supplies of more than 187,000 tonnes in 2022, when the market recorded a near 17,000-tonne surplus.
"Electric vehicle use of cobalt is very strong and the forecast remains very strong. Aerospace and defence are also very strong," Nagle said, adding the use of cobalt in consumer goods had been weak, but was picking up.
Although identified as a critical mineral by the United States and Europe, Chinese battery producers have switched from nickel, cobalt and manganese (NCM) chemistry to cheaper lithium iron phosphate (LFP) batteries. That means cobalt demand will grow less than previously expected.
Surpluses are expected to remain a feature of the cobalt market as producers in Indonesia ramp up production and exports from China's CMOC Group Tenke Fungurume mine (TFM) in Democratic Republic of Congo reach the market after a one-year stoppage caused by a dispute with the government. In 2021, TFM supplied 10% of the world's cobalt. (Reporting by Pratima Desai and Clara Denina; editing by Barbara lewis)