[Featured Stock] Cosmo Chemical, Surge in Cobalt Due to Chinese Hoarding... Emergency Beyond Rare Earths

[Asia Economy Reporter Hyungsoo Park] Cosmo Chemical is showing strong performance. The surge in cobalt prices, a battery material used in electric vehicles, smartphones, and laptops, appears to be influencing the stock price. The simultaneous rise of rare earth-related stocks in the domestic stock market seems to have led to increased interest in cobalt.

As of 2:29 PM on the 15th, Cosmo Chemical is trading at 12,000 KRW, up 6.19% from the previous day.

According to Hong Kong's South China Morning Post (SCMP), last week cobalt was traded at $53,000 per ton on the London Metal Exchange, the highest price since December 2018. Cobalt prices have been steadily rising since Chinese authorities announced last year that they would increase cobalt reserves in response to the electric vehicle production boom.

According to a recent report by the price reporting agency Benchmark Minerals, China's battery production in January this year increased by more than 300% compared to the previous year. Chinese companies continue to purchase cobalt from Africa, a major cobalt-producing region. Raw material market analysis firm CRU forecasts that the global cobalt market will remain unstable over the next five years.

Cosmo Chemical's subsidiary, Cosmo Eco Chem, is a manufacturer of electrolytic cobalt and cobalt compounds. Their website introduces the company as the only domestic producer of cobalt, a key material for electric vehicle batteries, in Korea.

Rare earth-themed stocks such as Dongkuk RnS and Union are rising sharply. The Quad, a security dialogue group consisting of the U.S., Japan, India, and Australia and a coalition to counter China, discussed ways to weaken China's dominance in the rare earth sector at its first summit, signaling the start of a rare earth war with China. However, stock market experts advise, "It is necessary to observe whether companies known as rare earth-related stocks will see performance improvements due to the rare earth turmoil."