Cobalt market participants responded cautiously to news of a plan by Cobalt Holdings to build a significant cobalt stockpile by purchasing 6,000 tonnes of cobalt from miner Glencore – a volume slightly below an entire year’s spot market sales, in Fastmarkets’ estimate – following a $230 million listing on the London Stock Exchange (LSE).
Following the flotation, Cobalt Holdings, a holder of physical cobalt, planned to purchase “an initial quantity of cobalt worth $200 million” – 6,000 tonnes of cobalt metal this year – from Glencore, it said on Monday May 12 in a stock exchange announcement.
Glencore is the world’s second-largest producer of cobalt. It planned to invest $24.4 million in the offering in June to buy a 10% share in Cobalt Holdings.
The annual amount of cobalt metal traded on the spot market is approximately 7,000-10,000 tonnes, 10-15% of the total market, Fastmarkets analyst Robert Searle estimated.
Market reactions to the cobalt stockpile announcement
Cobalt market participants were awaiting clarity on the export policy of the Democratic Republic of Congo (DRC) before gauging the full effect that the planned purchase might have on global supply.
The DRC is the world’s largest exporter of cobalt, but it banned cobalt exports on February 22 this year, leading to a surge in prices.
“There is no need for a knee-jerk reaction,” one trader told Fastmarkets. “We need to see what the DRC government decides.”
Traders cite caution amid uncertainty in DRC export policy
The DRC export ban was initially due to last for four months. Uncertainty about what would come next was creating tension in the market, with many market participants attending the 31st Cobalt Institute conference, May 13-15, in Singapore.
Some market participants expected further clarity from the DRC government to become evident at the conference.
Price stability expected from large-scale plan
Another trader described the move by Cobalt Holdings as “relatively positive,” saying that the planned cobalt purchase would reduce the volume of excess units in the supply chain and “provide medium-term liquidity.”
A third trader also looked to the DRC for a guide to what the market would do next.
“It’s a pure cobalt play that they believe is historically undervalued,” he said, “but current prices are down due to CMOC-Kisanfu oversupply. Everything depends on the DRC – if it removes the ban, it changes the [market]. Cobalt [prices] rallied by 50% on that ban.”
Before the export ban, cobalt prices had been steadily falling in response to supply from China’s CMOC Group, the world’s largest producer of cobalt.
Why Cobalt Holdings is betting on a long-term cobalt stockpile
Cobalt Holdings’ plan to stockpile as much as 6,000 tonnes of cobalt bought at prices of more than $15 per lb signaled a long-term plan to stockpile the metal, Searle said. “Despite the rise in prices from late February,” he added, “current metal prices are still below the long-term historical average.”
Fastmarkets’ daily price assessment for cobalt, standard grade, in-whs Rotterdam, was $15.25-16.50 per lb on May 12, the same as in the previous session.
Standard-grade cobalt metal prices have averaged $18.15 per lb on the low end since the launch of the price assessment in November 1992, Searle said.
A cobalt metal producer added that the key uncertainty remained the DRC’s export ban, but Cobalt Holdings’ plan could slow the price decline that has been seen already, before flows from the Central African country were halted.
Purchasing as part of LSE listing and supply agreements
Cobalt Holdings’ initial planned cobalt purchase was part of the company’s six-year supply contract with Glencore worth $1 billion.
The purchase was tied to Fastmarkets’ cobalt index, Cobalt Holdings said.
The initial purchase “will be undertaken at an approximately 4.8% discount to the last quoted Fastmarkets cobalt standard-grade mid-price of $15.88 [per lb] on May 9, 2025,” Cobalt Holdings said. “Certain freight and logistics charges will also be incurred, resulting in a discount of approximately 3.1%.”
The company planned to buy 1,500 tonnes of cobalt from US-based commodity investor Anchorage in 2031, according to the statement.
Anchorage also planned to invest $23 million for a 9.5% stake in the forthcoming flotation.
Strategic vision for a secure and liquid cobalt stockpile
“We believe that now is the right time to build a strategic stockpile of cobalt,” Cobalt Holdings chief executive officer Jake Greenberg said, citing “cobalt prices below long-term averages” and the metal’s importance for the growth of electric vehicle (EV) battery demand.
Cobalt Holdings will buy cobalt brands approved by the London Metal Exchange or included in Fastmarkets’ cobalt index, it said, “to ensure quality, liquidity, and sustainability of supply.”
The initial purchase would be made mainly in Rotterdam and Antwerp, and would happen “in one go,” one market participant believed.
It was likely to be “a mix of standard- and alloy-grade cobalt metal,” another market participant told Fastmarkets.
Cobalt Holdings added that if admission onto the Stock Exchange did not happen within 30 days from May 12, the price of the initial purchase would be “the Fastmarkets cobalt standard-grade mid price on the date 30 days prior” to the date of listing.
