Congo extends cobalt export ban, cobalt prices see second wave of rise

Cobalt prices are expected to experience a second wave of upward trend

According to the Commodity Cobalt Market Analysis System of Shengyi Society, the cobalt price on June 23 was 249800 yuan/ton, a significant increase of 7.35% compared to the cobalt price of 232700 yuan/ton on June 22. The government of the Democratic Republic of Congo announced an extension of the temporary ban on cobalt exports for another three months, leading to a significant decrease in supply expectations and a sharp rise in cobalt prices.
Congo decides to extend cobalt product exports for 3 months
On June 21, the board of directors of the Strategic Mineral Market Supervision and Control Authority of the Democratic Republic of Congo took significant regulatory measures. In view of the continued high inventory of cobalt in the market, it has been decided to extend the temporary ban on cobalt exports for another three months from the effective date of this decision, applicable to all cobalt exports originating from mining in Congo, regardless of whether they come from industrial, semi industrial, small-scale or manual mining.
Congo’s exports are expected to transition from oversupply to shortage
The government of the Democratic Republic of Congo has extended the temporary ban on cobalt exports for another three months, which will make it difficult for China to import cobalt hydrometallurgical intermediates from the country from June to December. The expected reduction of 128000 tons in cobalt raw material exports from the Democratic Republic of Congo in 2025 may shift the global cobalt industry from oversupply to shortage, leading to a decrease in supply in the cobalt market and an increase in the driving force for cobalt price increases.
Overview and Prospect
According to data analysts from Shengyi Society, the cobalt export ban in the Democratic Republic of Congo in February led to a significant increase in the price of electrolytic cobalt. However, the domestic cobalt industry has accumulated a large amount of historical inventory, and cobalt manufacturers have been selling at high levels, resulting in a sharp rise in cobalt prices before falling back from high levels. The extension of the cobalt export ban in the Democratic Republic of Congo has significantly reduced the expected supply in the cobalt market, and increased market expectations for a rise in cobalt prices, leading to upstream reluctance to sell. The cobalt industry may shift from oversupply to supply shortage, and cobalt prices are expected to start a second wave of upward trend.
However, there are still uncertain factors in this upward trend. Firstly, in terms of policies, the implementation of the cobalt export ban policy by the government of the Democratic Republic of Congo may not meet expectations, and the reduction in supply in the cobalt market may not be as expected; Secondly, in terms of supply, the inventory of cobalt industry is still at a high level, the mining output of cobalt ore in Indonesia and other markets has increased, and the supply of cobalt ore in the cobalt market has increased, and the supply of cobalt market may exceed expectations; In terms of final demand, the demand for consumer electronics and ternary power batteries fell short of expectations, and the cobalt market’s upward support was insufficient.
In general, in terms of supply, the government of the Democratic Republic of the Congo extended the ban on cobalt exports, and the supply of cobalt in the cobalt market decreased. However, the government of the Democratic Republic of the Congo was hard to predict the implementation of the policy, and the mining output of Indonesia’s cobalt mine increased. In addition, the cobalt industry’s inventory was still high, so the supply of cobalt in the cobalt market was short or not as expected; In terms of demand, the growth in demand for consumer electronics and ternary batteries is slow, and the support for the rising demand in the cobalt market is insufficient. Supply shortage and poor demand are expected to lead to a significant increase in cobalt prices in the future, which will then fluctuate and stabilize.