Influence to the RC Industry Caused by Cobalt Price Increase

Cobalt price has been dramatically raised since 2017. Due to the intense demand and supply relationship, Cobalt price still seems to increase in the next two years. As the most important raw material in RC batteries. How much cobalt price increase will have a straight?

Cobalt Price Raising Trend

Tight supplies continued to push cobalt prices higher in the week ended Friday January 26. Raises of cobalt begins from early 2017 and this rising trend has been carried onto 2018. As a major part of the Lipo battery material, the increase in Cobalt price is having strong effect on the Lipo battery pricing and related RC fields.

Cobalt Price Raising Trend

Source: http://batteryuniversity.com

Cobalt increased 2,500 USD/MT or 3.24% to 80,000 on Tuesday January 30 from 80,000 in the previous trading session. Historically, cobalt reached an all time high of 80000 in January of 2018.

Cobalt Price Raising Trend-1

Source: TradingView

Cobalt prices are likely to rise significantly in the next two years as the industry struggles to meet rising demand from batteries used in electric vehicles, BMO Capital Markets said.
Being a major element in Lipo batteries production, cobalt is currently non replaceable. As the raise in cobalt price, final products Lipo battery are foresee to be raised accordingly.

Effects to the RC industry

RC batteries are consumables in day to day RC activities. The raise of cobalt directly affects the cost of RC hobby itself. In order to maintain our high standard of the use of raw materials, Gens ace have to reduce the profit, at the same time also go through only a small percentage of 10% price raise across the product line. There’s possibility of another adjustment to be made including Tattu batteries depending on the cobalt price in the future.

Actions took on some suppliers

Some suppliers choose stay with the current price or event discount on products in order to win the price war. However due to the huge change of the raw material it’s impossible to make a profit. Many will substitute lower quality raw materials for cobalt to cut down the cost. Choosing a reliable brand like Gens ace for your RC batteries is quite important at this moment.

Tips for RC fans

With many uncertain factors, weather or not the price raise of raw material price could bring in a large scale of manufacturer’s price increase, is still remains to be seen. From consumer point of view, timing to stock up your RC consumables can also be a very tricky question.

Totally 60% increase to Cobalt price after year of 2017 and another 30% increase took place in just the first month of 2018. To avoid another round of price increase in the near future, it seems to be a best solution now to plan your consumption and stock up what you need for the next racing season or rest of the year.

New material has been discovered by scientists to place the cobalt to resolve the shortage of raw material issue, such as grapheme, iron etc. Of course, the lab is a long way from the track. Massive production of batteries based on new materials still have long way to go.

For general RC funs, it could be wiser to wait until you actually need to restock despite the increase of battery. In addiction, it also saves you from batteries maintenance while storing in the shelf.

For heavy RC players. Since the amount of batteries consumed. There seems to be less point to wait until you actually need to restock. You don’t know when to expect the next price raise. Best solution will be plan your battery for the coming racing season or even rest of the year.

Conclusion:

Cobalt price will still seems to be in raising trend in the future. There is no sign to show when and where the tread will stop. What is you opinions on the cobalt price raise? Welcome to join in the discussion.

Genstattu Author

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