Reuters – Congo’s attempt to control cobalt market risks becoming supply shock – battery materials
LONDON, Dec 3 (Reuters) – It’s been almost 10 months since the Democratic Republic of Congo, the world’s dominant cobalt supplier, halted exports of the battery metal.
February’s export ban was replaced with a quota system in October but the country’s producers are still awaiting the green shipping light from Congo’s minerals authority ARECOMS.
The withdrawal of supply from the country that accounted for 70% of global mine production last year has been a booster for the bombed-out cobalt price.
The CME spot cobalt metal has risen from $10 to $26 per lb since February. Cobalt hydroxide , the form of the metal exported by Congo, has surged from $6 to $23 per lb over the same time-frame.
Higher pricing is of course one of the core goals of Congo’s new export quota scheme but a sustained supply shock isn’t going to help a metal that is already facing challenges in the electric vehicle battery market.
EXPORT BAN HITS CHINA
It takes around three to four months to ship cobalt hydroxide from the Congo to China, where it is processed into cobalt sulphate for battery manufacturers.
The long supply chain is why Chinese imports of cobalt intermediaries from the Congo initially held up well in the months after the February suspension of shipments.
But imports have fallen sharply since May. Volumes of 50,000 metric tons over June-September were less than what previously passed through Chinese customs every month.
As the supply hiatus lengthens, the impact on the cobalt processing chain grows. Even if Congo’s exports resumed tomorrow, the material would only arrive in China towards the end of the first quarter of next year.
A drawdown of Chinese cobalt hydroxide stocks was always anticipated, given Congo’s allocated export quotas for the next two years are around half the country’s previous shipping levels. But the seven-week delay since the quota announcement will serve only to accentuate the inventory depletion.
There is an option of converting cobalt metal to sulphate, if the price differential covers the reverse-smelting costs. But, according to analysts at BNP Paribas, “only very few plants” have the environmental permits to process cobalt in that way.
The best-case scenario, one where exports resume in the next few days, is a severe but short supply squeeze in the early months of 2026 before deliveries to China arrive.
But there is also the growing risk of a more profound supply crunch, generating another swing of cobalt’s boom-and-bust pricing cycle.
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Reuters – Congo’s attempt to control cobalt market risks becoming supply shock – battery materials, source
