With no suspension of production, producers are now expected to stockpile cobalt to wait for permission to export once again. The export suspension will be reviewed in three months, according to documents seen by Fastmarkets.
The DRC accounts for an estimated 77% of global cobalt production, which was estimated at 300,000 tonnes, according to Fastmarkets research, with a 27,000 tonne refined market balance surplus. The market has been in a persistent state of oversupply, which has pushed standard grade metal prices to eight-year lows.
Producers were reportedly unaware of the coming measures, which were imposed on Saturday February 22, and were taken by surprise by the news reports.
China’s imports of cobalt intermediates surged in 2024, increasing by 64.60% to 188,056 tonnes compared with 2023. This sharp increase in production was driven by the increased cobalt mined supply from the DRC.
“In the last four months of 2024, the DRC exported just under 68,000 tonnes of cobalt contained in hydroxide to China. A halt in these volumes will have a significant impact on the availability of feed for China’s refiners. When comparing China’s refined production in 2024 with total imported cobalt intermediate levels from the DRC and Indonesia we can see there are still large inventories in the country — but should China continue to process metal at the rate it is these will quickly be depleted should the export ban be upheld. The ban is likely to highlight Indonesia’s growing importance and critical role as a supplier of cobalt intermediates to China” according to Fastmarkets analyst Robert Searle.
“Everyone has been saying a black swan event like this is needed to jolt the cobalt market but now it’s here, everyone is surprised,” one market participant said.
Market participants were mixed in their initial reaction to news of the export suspension.
“This doesn’t change the availability of cobalt metal, which is plentiful in Europe, plus DRC production can still continue, so it’s just damming up the hydroxide supply for four months,” one trader said.
“The market impact will depend on existing [cobalt hydroxide] stocks in China, visibly there is difficultly but there will be supply already on the water [to China] so it’ll all depend on if they can make do with what’s already there and what they can get elsewhere,” a second trader said.
“Without real demand ramp up, then ultimately it’s a disruptive but not existential event, and raises key questions regarding the fate of the stocks that will build up over the next four months, but clearly it isn’t bearish in the short term,” a third trader said.
The largest global producer of cobalt, CMOC Group, recorded a 106% increase in cobalt production in 2024 to 114,165 tonnes from its two copper-cobalt mines in the DRC. The company announced its 2025 production guidance of 100,000-120,000 tonnes on January 22.
Fastmarkets’ daily price assessment for cobalt hydroxide 30% Co min, cif China was $5.65-5.75 per lb on Monday February 24, unchanged from previous assessment.
“Stockpiling cobalt is a different beast now with some of the copper mines like CMOC’s Kisanfu project in the country, the cobalt was all exported because it’s difficult to find somewhere to store it all,” said a second market participant.
Fastmarkets assessed cobalt standard grade, in-whs Rotterdam at $9.50-10.40 per lb on Monday, unchanged from the previous session.
With copper prices rallying since the start of the year, this export ban could pose a headache to copper/cobalt producers in the DRC, who will want to increase production to take advantage of high copper prices.
With cobalt primarily found as a by-product of copper mining in the DRC, exports of copper are unaffected by the ban and can continue as normal reportedly.
However, some market participants have said copper could be impacted if delays at the borders mount up through checking trucks for cobalt material.
“There will be trucks being loaded now, trucks on the way to the border, trucks already at the border, I have no clue what will happen to those and if they get turned back. If the big queues happen again, it’ll slow all exports down” one producer said.
One market participant also pointed to the rise in Indonesian production that could seek to capitalize and improve market share during the export suspension.
“Well [the news] doesn’t change much as the oversupply is already present, but assume futures firm up, bids have firmed since, and physicals might react, but it plays into Indonesians hands nicely,” a fourth trader said.
Indonesia accounted for 31,000 tonnes of cobalt production in 2024, holding a 10% market share, according to Fastmarkets estimates.
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