Australia Markets closed

UBS forecasts cobalt price to climb 60% over 18 months

Tom Richardson

The prices of commodities such as iron ore, oil, gold, lithium and copper are notoriously hard to forecast over the short or long term.

For example, back in mid-2016, Goldman Sachs infamously slashed its coal price forecast and warned investors off coal right before its price went absolutely gangbusters for the next two years. 

However, cobalt investors have some good news today if the analysts at UBS are on the money about the cobalt price direction over the next year.

According to a Reuters news report, UBS is forecasting a 60% climb for cobalt prices over the next 18 months to US$20/lb, due partly to the closure of a Glencore cobalt mine in the Democratic Republic of Congo. The article also reports that cobalt prices could move even higher by 2024–25 due to a supply deficit. 

The ASX has dozens of micro- and small-cap cobalt miners and prospectors looking for a cobalt cash-in, with some of the more popular ones including Clean Teq Ltd (ASX: CLQ), Havilah Resources Limited (ASX: HAV), Cobalt Blue Holdings Ltd (ASX: COB), Jervois Mining Limited (ASX: JRV) and Australian Mines (ASX: AUZ).

Both cobalt and lithium are key ingredients in the batteries required to power electric vehicles, while cobalt is also commonly used in the batteries to power increasingly popular everyday electronic items such as laptops and iPhones.

The story is attractive on first blush, but whether any of these companies can turn rising demand into free cash flow and returns for shareholders is another story. 

Still, if UBS is on the money, these stocks could enjoy a strong 2019 and 2020.

For another sector set for big gains in the coming year, don't miss this little-known ASX marijuana stock that looks like it's got a bumper 12 months ahead.

One ASX Stock For An Estimated $US22 Billion Marijuana Market

A little-known ASX company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $US22 billion.

Cannabis legalisation is sweeping over North America, and full legalisation arrived in Canada in October 2018.

Here's the best part: we think there's one ASX stock that's uniquely positioned to profit immensely from this explosive new industry... taking savvy investors along for what could be one heck of a ride.

AND, this is the first time The Motley Fool Australia has EVER put a BUY recommendation on a marijuana stock.

Simply click below to learn more on how you can profit from the coming cannabis boom.

Click here to find out more

More reading

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019