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A new cobalt application is likely to increase demand for the mineral, especially as high-tech, coal-fired plants emerge, however, this increase in demand may not cause a dent in the oversupply present in the cobalt market.
Together with Hitachi Ltd. (TSE:6501), researchers at Tohoku University in Japan have developed cobalt and nickel alloys that can be used in coal-fired power plants, a newspaper reported. The resistance of cobalt alloys to heat is well known, and this new development could lead to extra demand for the metal; cobalt prices, which have been in a funk to due to oversupply, could in turn be bolstered, an analyst said.
The new cobalt and nickel alloys can withstand 800 degree C-class steam, and could be used for the processing of such materials as boiler piping and turbine rotor blades. The article added, “[c]urrently, iron alloys are in use at coal-fired power plants. As the temperature-resistance limit of an iron alloy is considered to be about 600 deg C, a new material is needed for use in steam temperatures beyond that. To that end, the development of materials that can withstand 700 deg C-class high temperature steam is being advanced in Japan, the U.S., Europe and other countries.”
Presently, coal-fired power generation efficiency at the generating end is about 43 percent at 600 degree C-class ultra-supercritical (USC) plants, the article said, adding that Tohoku University is “expecting 50% efficiency at the sending end” from forgings that use such nickel or cobalt alloys.
USC coal plants require less coal per megawatt-hour, leading to lower emissions, higher efficiency, and lower fuel costs per megawatt. And the fossil fuel industry has made considerable progress in increasing the efficiency of supercritical (SC) and USC technology, Engineering and Technology Magazine reported. Such advances are important as currently coal produces more than 40 percent of the world’s power and its use is expected to rise, especially in emerging markets.
Coal-fired demand will not cure oversupply
“Cobalt’s applications are growing, from prosthetics to aerospace to power plants,” a London-based analyst told Cobalt Investing News. “Cobalt alloys in coal-fired plants should help increase demand for cobalt, but it is unlikely to cure the oversupply in the market. The impact of such demand is going to be small for now until we have a better idea of how much cobalt will really be needed in USC plants.”
The Cobalt Development Institute says that cobalt has a high melting point, about 1,493 degrees Celsius, and retains its strength to a high temperature and is hence useful in cutting tools, superalloys, surface coating, high-speed steels, cemented carbides, and diamond tooling.
Demand for cobalt, which is primarily a by-product of nickel and copper mining, is expected to rise seven percent year-on-year, and an oversupply in the market is expected to last at least until 2013. Demand is expected to rise to over 100,000 tonnes by 2016. Most of the demand is going to come from chemicals for the battery industry and superalloys for aircraft engines.
“Demand for cobalt for use in coal plants is still developing,” the analyst said. “Many companies are building USC coal-fired plants in emerging markets, where the growth is going to come from.”
In February, Hitachi won an order to supply two 1,050 megawatt USC coal-fired thermal plants in South Korea. China, the US, and other countries are also constructing SC and USC coal-fired power plants.
The Democratic Republic of the Congo supplies nearly two-thirds of the globe’s cobalt, most of which is refined in China. Most western countries have classified cobalt as a critical mineral and have expressed the belief that the supply dominance of China and Congo needs to end.
Securities Disclosure: I, Karan Kumar, hold no direct investment interest in any company mentioned in this article.