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Cobalt prices jumped Monday after the world’s largest producers extended a ban on exporting battery metals to support the market following a sharp sale in recent years.
Cobalt prices fell by about 60% in more than three years, but rose by almost 10% in the replacement of Wuxi stainless steel after a weekend announcement by the Democratic Republic of the Congo’s Strategic Minerals and Materials Market Regulation and Control Agency. He said the four-month cobalt export ban imposed in February would continue until September.
According to the Market Intelligence Group Project Blue, Dr. Congo produced 72% of the world’s cobalt mine supply in 2024. Metals are an important component of some batteries used in electric vehicles.
The government is trying to deal with the sustained oversupply surplus in the market that has been squeezing prices since 2022. They hope to support domestic industries by reducing key sources of global supply and increase tax or royalty income from miners in the long term.
The country is also working to boost the broader domestic mining sector, including the possibility of mineral trade with the United States.
Glencore, a commodity trader, one of Dr. Congo’s leading cobalt producers, declared Force Majoule this year in several of the cobalt contracts following the imposing of the ban. Such legal mechanisms illustrate exceptional circumstances that may make it impossible to fulfill a contractual obligation.
However, the company has so far stock of cobalt outside of Central African countries, allowing it to fulfill all customer contracts so far.
The cobalt stockpile outside Dr. Congo “will reach very low levels by the September 21 deadline if nothing else changes,” said Jack Bedder, founder of Market Intelligence Group Project Blue.
“We expect that the supply of cobalt hydroxides will continue to move closer to the third quarter of this year, with the need to continue to lower inventory to raise prices,” said Rob Searle, an analyst at pricing company Fastmarkets.
Cobalt is one of the key mineral industries controlled by Chinese companies, and controls most of the world’s metal production and processing.
Complicating the supply and demand dynamics is the fact that cobalt is a by-product of copper, and there is high demand for a wide range of applications, including the energy and technology sectors.
The price of copper benchmark London has risen sharply since April, trading at around $9,600 on Monday.
“As long as copper prices are reasonable, production of (cobalt) will not decrease,” said one executive working in the sector.
The cobalt mining sector is hoping that the government of Congo will consult with the industry about the quota system to resume exports in the coming weeks, executives said.
Given that it takes about 90 days for transportation to be processed from Dr. Congo to China, cobalt exports “must resume quickly.”
