How to Invest in Cobalt
Cobalt is a difficult metal to categorize, as some consider it to be an industrial metal, while others place it under the rare earth/strategic metals umbrella. Given its wide use across much of the industrial world, we placed the metal in this respective category. Applications of this metal include aircraft engines, drill bits, magnets, batteries, pigmentation, orthopedic implants, and even gamma rays. The majority of cobalt is used for superalloys which are resistant to both corrosion and natural wear-and-tear.
From a production standpoint, Asia dominates, as the region accounts for nearly half of the world’s output. Both Europe and the Americas each account for just under a quarter of production each, leaving little room for producers outside of these regions. As previously stated, superalloys and batteries are two of the most prominent uses of the metal, though it has a fairly large presence in the mining and drilling industry as well as in colors/pigments.
An investment in cobalt can be seen as a play on the industrial sector and its potential growth. Companies may trade cobalt for hedging purposes, but more traditional investors will find the metal as a useful play on macroeconomic factors and the behavior of the global economy.
Ways to Invest in Cobalt
There are 2 ways to invest in Cobalt: Futures and Stocks. Click on the tabs below to learn more about each alternative.
What are Cobalt Futures?
Cobalt futures can be found on the London Metal Exchange under the ticker (CO). These futures began trading in early 2010 and are quoted in U.S. dollars per ton. Contracts range over a span of 15 months, allowing investors to make bets for varying time periods of this metal.
How to Buy Cobalt Stocks
Investors have a wide variety of options when it comes to cobalt stocks, unfortunately, options on U.S.-based exchanges are hard to come by. Instead, those seeking to allocate to this commodity should look to foreign exchanges (like Canada) to find lucrative plays. Some of the better-known firms include Formation Metals (FCO) and Puget Ventures (PVS).
Cobalt in the News
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