In the competition to source critical minerals, there are few commodities as strategically important as cobalt. It is a necessary component of almost every type of battery cathode chemistry, including lithium-ion batteries which will be needed in growing quantities for many industries, especially electric vehicles.
China dominates global supply chains for cobalt—as well as lithium, nickel, and other critical minerals. This situation hasn’t constrained imports to the U.S. and other democratic countries, but it’s a growing security concern for leaders from both parties, as highlighted in the Biden Administration June 2021 supply chain report.
Resilinc’s CommodityWatchAI can’t solve the long-term geopolitical challenges surrounding cobalt and other critical commodities, but the AI-powered tool is already empowering supply chain and sourcing teams to monitor and forecast supply and pricing trends and use that intelligence for strategic advantages.
To validate CommodityWatch’s AI capabilities, Resilinc conducted a retrospective evaluation of how well the Artificial Intelligence tool performed in 2020 when demand signals for cobalt—along with almost every other material in supply chains—showed unprecedented volatility due to the pandemic.
“We looked back to compare the indicators of future supply and demand trends for cobalt that were provided to our customers with the actual market prices that later manifested,” explained Shahzaib Khan, Resilinc’s Senior Director of Operations. The analysis showed that when CommodityWatch forecast price increases early in the year because of the pandemic lockdowns in China, policy changes in the top cobalt-mining country—Republic of Congo—and other factors, prices indeed increased.
“That was followed by a number of indicators that prices would go down due to the pandemic-induced destruction of demand for a vast range of products,” said Khan. “And prices did indeed retreat.”
In the second and third quarters of 2020, CommodityWatchAI forecast price increases because demand for vehicles and other products was rebounding, and cobalt processors were taking aggressive positions to consolidate raw materials. “As foreshadowed by CommodityWatch, by the third quarter, cobalt prices started soaring,” said Khan.
According to Sumit Vakil, Resilinc’s Co-founder and Chief Product Officer, “Commodity Watch is the result of Resilinc’s extensive investment in AI, natural language processing, and data analytics to solve some of the most difficult problems in supply chains.”
Cobalt and other commodities monitored by CommodityWatchAI “are subject to intense competition that spans across industry verticals,” explained Vakil. “In many cases, the production and supply of these materials are controlled by a few companies or governments. Any changes in regulations, in company ownership, in geopolitics and other factors—such as pandemics—can create big disturbances in prices and supply availability.”
Like Resilinc’s EventWatch supply chain disruption monitoring service, CommodityWatchAI monitors over 4 million data sources in more than 100 languages to identify trends that may affect supply, demand, and pricing of commodities. The AI tool also draws on the company’s more than 11 years of experience monitoring supply chain for its customers and its vast database—which now includes about a half-million suppliers. “By honing in on the historic behavior of each commodity, the tool is armed to predict how different variables will affect different commodities,” said Khan. “Each commodity has a unique value chain and unique set of variables that influence it.”
Vakil observed that this level of intelligence is only possible with a sophisticated AI tool. “This technology filters out the noise in the data feed to generate key insights that reveal trends in how pricing and supply of commodities will likely change in the future,” he said. “To collect, synthesize and get intelligence out data on this scale, you need AI.”
“Commodity Watch enables users to make informed, educated, prepared decisions,” added Khan. “Especially in negotiations, re-negotiations, determining cost ratios, lead times, when to buy, when to sell, future project estimates, and other actions, having proactive insights can put our customers in advantageous positions.”
Currently, CommodityWatchAI monitors 30 commodities, including but not limited to: gold, silver, aluminum, copper, caustic soda, cobalt, helium, paper, and tin—commodities chosen due to their wide use across products and industries. Resilinc will continue to add commodities to the platform.
