"Capacity expansion will need to increase if supply...

It said cobalt prices had reached "dizzying heights" this year amid a tight market and supply concerns and said it believed demand from most major end-users, particularly the battery sector, was set to increase.

"Roskill's base-case forecast suggests that demand from the battery sector alone could reach 240,000t by 2027 (more than double the size of the whole market today)," it said.

Roskill, which is due to release a cobalt industry, markets and outlook report later this month, said huge volumes of new mine, intermediate and refined capacity would be required.

"While the major refined producers in China all have aggressive 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," it said.

"Crucially, this refined capacity will need feedstock, and while there should be sufficient amounts to the end of this decade (if Glencore's Katanga and ERG's RTR operations bring units into the market as expected) there is considerable uncertainty thereafter."

The cobalt price has remained close to a 10-year high reached earlier this year and was worth US$90,500 a tonne on the London Metal Exchange at Friday's close.