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D E C E M B E R / J A N U A R Y 2 0 2 0 www.resourceworld.com 17 COMMODITIES OUTLOOK coming years helped by solar and 5G buildout, both of which are silver inten- sive according to BMO. COBALT Last year, a tight market set against a bullish outlook for demand for cobalt in lithium-ion batteries, and concerns over long-term access to cobalt supply, drove prices for cobalt to their highest level in 10 years, reaching over US $40/lb in April 2018. But then a period of decline set in as the high demand and tight supply meant that producers were receiving very high payables that ultimately led to a significant supply response from producers in the DRC, including artisanal miners. Refined producers in China took advantage of mar- ket conditions and produced additional cobalt metal to bring in revenue before year end. Though prices have fallen and market sentiment is depressed, Roskill still fore- casts significant cobalt demand growth over the next decade, with the market expected to roughly double in size. Cobalt is used in a wide range of applications including batteries, nickel alloys, tool materials, catalysts and magnets. With demand across most major end-use appli- cations set to increase, and with demand from the battery sector expected to enjoy double-digit growth over the coming decade, the market is gearing itself up for a sustained period of unprecedented con- sumption growth. This will require huge volumes of new mine, intermediate, and refined capac- ity. While the major refined producers in China all have expansion plans, Roskill considers that the recent rate of capacity expansion will need to increase if supply is to meet demand through the next decade. COPPER Copper is often used as a gauge of global economic health, which has been hit by the prolonged trade war between China and the US. The uncertainty of the future of this trade dispute coupled with political unrest in Chile (the world's largest pro- ducer) continue to weigh heavily on the price of the base metal and despite a brief rally towards the crucial US $3.00/lb mark in the first quarter of the year, the price has since dropped back to a low of around US $2.50 and is currently trading around the US $2.68 level. But according to Capital Economics, copper will be a star performer next year with prices rising back above US $3.00/lb by the end of 2020 as the pace of demand outstrips supply. Not everybody sees it that way though. According to the International Copper Study Group, the copper market should see a surplus of 281,000 tonnes in 2020, swinging from this year's deficit of 320,000 tonnes, keeping prices depressed. LEAD AND ZINC The latest report from the International Lead and Zinc Study Group (ILZSG), forecasts that global demand for refined lead metal will rise by 0.8% to 11.90 mil- lion tonnes in 2020. Chinese demand is expected to fall by 0.5% influenced by a decline in automotive production and increased use of lithium-ion batteries in both the motorcycle and e-bike sectors and for Uninterruptable Power Supply (UPS) stationary backup systems. Despite reduc- tion in demand in both Europe and the USA in 2019, the ILZSG forecast a recov- ering lead demand in Europe of 0.8% and 1.2% in the US in 2020. On the lead sup- ply side, a rise of 3.9% is forecast for 2020. In the same report, world demand for refined zinc metal is forecast to increase by 0.9% to 13.80 million tonnes in 2020 and world zinc mine production is forecast to increase 4.7% to 13.64 million tonnes in 2020. While zinc's macro-fundamentals could arguably support more robust prices, the metal's price has languished since its decade-high rally to US $1.63/lb in early NICKEL 1 YEAR GOLD 1 YEAR