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Cobalt metal prices after the extension of the DRC cobalt export ban on June 21 have not followed the same trend as they did in February, when news of the initial four-month ban broke unexpectantly.
Standard grade cobalt metal prices on a mid-point basis increased by 0.2% in the 12 assessments from Monday June 23 to Tuesday July 8. This is compared with a 43.2% increase in the 12 sessions from Monday February 24 to Tuesday March 11.
Market participants have said this lack of price increase has been a result of the extension being expected as well as the impact of seasonal quiet summer demand levels, with consumers already well-stocked ahead of scheduled maintenance closures.
“No one thought the ban was going away so there was no sudden panic when [the extension] was announced. Hydroxide is still arriving in China and buyers there don’t seem worried for material,” one cobalt trader said.
The volume of intertrade liquidity on cobalt metal and hydroxide is also slower compared with the initial two weeks in February.
Some market participants have said that the decision by Cobalt Holdings to not conduct their initial public offering in June may have contributed to the quiet period of liquidity observed after the DRC cobalt export ban extension.
Cobalt Holdings planned to raise financing to facilitate an initial purchase of 6,000 tonnes of cobalt metal this year with annual purchases following through 2031.
Fastmarkets’ daily price assessment for cobalt standard grade, in-whs Rotterdam was $15.35-16.10 per lb on Friday July 11, narrowing downward from $15.35-16.25 per lb in the previous session.
Reportedly most battery makers in China are also making do with long-term contract deliveries due to the seasonal summer slowdown in demand.
Fastmarkets’ daily price assessment of cobalt hydroxide 30% Co min, cif China was $12.35-12.70 per lb on Friday, up from $12.30-12.45 per lb in the previous session.
“The price movement upwards will first come to the intermediates, the DRC news is primarily a hydroxide story, after that metal will probably move,” a second trader said.
Market participants in China have pointed to September as a “critical point” for cobalt hydroxide inventory levels. Many buyers are operating at lower capacity as a result of weak downstream demand.
“A lot of buyers in China don’t seem to be panicking about future supply but I think it’s an act, and behind the scenes, lots of deals will be trying to get done. It could go crazy once the first big purchases happen and others try to follow,” the second trader added.
However, some participants have asked if the critical point for inventories in a couple months is coming.
“There’s a lot of supply to clear for those inventories to be minimal by September, I think it’ll be more towards the end of the year but it’ll happen one way or another,” a market participant said.
“I don’t think hydroxide inventories not being empty means the price will decline, stocks are still being worked through so likely price will remain in the sideways movement until the shortage eventually arrives,” another market participant said.
May Chinese imports of cobalt hydroxide in January-May were 7% lower than the same period last year. And 78% higher than in 2023 according to published China trade statistics. This is despite the export suspension since late February blocking trucks from leaving the DRC.
“The large import volumes in May does beg the question of whether the surplus of cobalt will remain at the end of the three-months extension. We’ll wait and see what the June figures look like for any hint though,” another trader said.
A DRC government advisor told Fastmarkets last month that they were not seeking to push the cobalt market into a deficit but rather return it to “healthy levels.”
“It’s hard to say when exactly it will be, but the tightness has to happen at some point, freight times into China take three months from Africa so it depends if units are available closer to China geographically. You can’t replace those DRC units though, it’s just not possible,” fourth trader said.
The DRC accounted for 99% of Chinese cobalt hydroxide imports in January to May which totaled 248,300 tonnes. This is due to the DRC being the country of origin rather than the country of embarkment.
A combination of large port stocks of hydroxide in Durban and Dar es Salaam as well as the several-month journey from Africa to China have kept China well-stocked. Material showing up in May import figures may well have been shipped prior to the ban in February.
“Port stocks in South Africa look to be okay for the moment, they are decreasing yes but it’s not a concern,” a fifth trader said.
“Given the timing of the ban, we would expect to see a fall in imported volumes in the June trade statistics. With the extension announcement, the earliest we are expecting to see significant cobalt hydroxide flows from the DRC to China will be the later in December, should the limit of trade remain in place for the full three months. The Chinese market is currently in its seasonally low period during the summer months but without the same inflow of refinery feed from Africa inventories are still going to have to be drawn down to meet demand. At current production rates we’re expecting the market to show tightness around September and October, supporting our view of firming prices,” Robert Searle, senior analyst at Fastmarkets said.
Much of the increase in import figures from 2023 has been caused by a ramp-up in production by the world’s largest producer CMOC Group, which increased 2024 cobalt production by 106% to 114Kt. First quarter production for 2025 also increased by 21% against the same period last year.
However, news last month of a force majeure notice on contracts by IXM, the trading arm of CMOC, has added a level of concern for future supply. The notice is reportedly the final to be issued from the perspective of Western cobalt producers in the DRC with others having been imposed in March and at least one Chinese cobalt producer having also issued a similar notice then too.
With cobalt hydroxide prices increasing by 116% on a mid-point basis since the ban, buyers in China have also sought alternatives such as recycled supply and mixed hydroxide precipitate (MHP).
MHP has been described as a “ready-made” battery feed input due to desired levels of nickel, cobalt and often lithium in the product.
Chinese imports of MHP have increased by 23% in January to May figures against the same period last year, according to China import data statistics.
“Indonesian MHP now makes up a significant portion of China’s cobalt intermediate feed. While the contained cobalt volumes of imported MHP cannot replace the levels from the DRC, this supply has proved invaluable for cobalt refiners and will continue to be so throughout the remainder of the year. While we do not see the clear opportunity for Chinese-backed assets in Indonesia to significantly ramp up MHP production in H2 2025, these elevated flows of material that we’ve seen in the first five months of the year are expected to continue to ensure cobalt sulfate producers can continue to meet their long term contract obligations” Robert Searle said.
While the cobalt market looks to endure another three months of the export suspension by the DRC, it’s not yet clear what will follow afterwards. Talk of export quotas have been mentioned previously but without information on the specifications or procedure.
With summer approaching, the market looks to be quiet however much emphasis has been placed on the Chinese import statistics for June. These will be released later this month. The figures will help to shed light on future price direction and inventory levels in China.
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