The Cobalt Mining Race of the Century:

Supply Destruction vs. Demand Destruction

And they’re off! It’s a steep downhill race, and it looks like Demand Destruction has the early lead. Yes, yes, consumption is down in the US! What speed it has! He could be slowing as Europe looks strong…nope! Wrong on that count, Germany is in recession now…look at Demand Destruction go!

Supply is slow out of the gate today folks, but he always starts that way. 10 years ago, after Bre-X, Demand Destruction blew him away – but he did narrow the gap at the end.

Supply’s trainers, Lower Metal Prices and Rising Inventories, are yelling at him from the sidelines.

There’s a record crowd of Investors watching the race on TV screens around the world. But they don’t look happy. There was clearly some big betting on Supply Destruction.

Oh wait, Supply Destruction is gaining! Nickel prices are falling and secondary cobalt supply is falling…Vale delays its mammoth Goro nickel project…Norilsk Nickel cuts production…it’s turning into a real horserace today folks. Supply and Demand are almost neck and neck!

But Japan just declared recession! Demand Destruction darts ahead. Demand Destruction is clearly very healthy. But wait…Baja Mining just delayed is copper/cobalt mine in Mexico…and oh, here’s a big one folks – Geovic Mining has just delayed their Nkamouna cobalt mine in Africa, which was going to be the world’s largest primary cobalt mine.

Supply Destruction takes the lead for the first time! They’re rounding the final turn, folks, and copper prices are now $1.50 per pound, less than cost for most producers. Demand Destruction is surging! Wait, that’s given Supply Destruction a big boost too!

It’s the homestretch, and all of a sudden Supply Destruction is way out in front? What? Over 40 companies in the heart of the copper belt in Congo have stopped production because of falling prices? Big copper cobalt producers like Anvil Mining is lowering production and Camec, a big cobalt producer, is suspending operations! They had the richest cobalt mine the in world!

Demand Destruction is making it close at the finish line – The Dow is tanking! – but no, Supply Destruction wins out today, folks, and the Investors in the stands are just plain ornery. They don’t like this one bit. They are so angry I don’t think they would care who would have won.

Come on folks, it’s only a race. Go home and kiss your new wife, Money In Your Mattress .