[hwillis]

Price crashes cause longer term price increases. The problem scenario is that a huge increase in cobalt demand could lead to a big oversupply of nickel as happened in 2007[1]. Mines are cash-poor so it only takes a few years of bad prices for most of them to go bankrupt and be forced to sell their assets. Since nickel and cobalt are mined side-by-side, the price of cobalt skyrockets to make up for the low nickel prices. Supply and demand bounce all over the place and the uncertainty makes it super unattractive to investors, which makes it harder to open or upgrade mines, which long-term raises prices.

Ideally careful pricing would avoid that situation, and most nickel mines will also be selling cobalt and will be well aware that nickel prices will be affected. However pricing is never perfect and the possibility of a crash is still there.

Also, lithium futures would get trashed, which would be bad for anyone invested in them.

[1]: https://en.wikipedia.org/wiki/2000s_commodities_boom#Nickel