Cobalt Prices Surge Amid Supply Concerns Following Congo Export Ban

Cobalt prices have increased due to supply fears after the Democratic Republic of Congo enforced an export ban. The Eurasian Resources Group declared force majeure on deliveries, impacting global markets with prices rising sharply. The export ban will be reviewed in three months, with potential quotas to be introduced during the suspension period.

On Monday, cobalt prices surged due to concerns about supply disruptions following a Democratic Republic of Congo export ban enforced by the government. Eurasian Resources Group (ERG) invoked force majeure on cobalt deliveries owing to this export ban, leading to trading halts on the Wuxi Stainless Steel Exchange, where prices increased by nearly 12% to approximately 240 yuan per kilogram, the highest since October.

European cobalt prices also rose significantly, with standard grade cobalt stored in Rotterdam climbing from $10.80 to $12.25 per pound between March 4 and March 7, according to Fastmarkets. The Congolese government’s unilateral decision to pause cobalt exports for four months aimed to control oversupply, which had previously driven prices to nine-year lows around $10 per pound or $22,000 per metric ton.

The force majeure declared by ERG, the third-largest cobalt producer in Congo, has heightened market tensions. Sources indicated that this action signified a serious commitment from Congolese authorities to uphold the ban, potentially hindering the availability of cobalt used in lithium-ion batteries that power electric vehicles. As ERG’s Metalkol operation accounts for a significant portion of Congo’s total cobalt production, this supply limitation has impacted global cobalt prices.

The Congo export ban will be subject to review in three months, with potential for modification or termination based on the observed results. Upcoming plans include the introduction of cobalt export quotas that will be negotiated during the suspension period, as stated by industry sources. Key players in the cobalt market, aside from ERG, include other major producers such as Glencore and CMOC Group.

The recent surge in cobalt prices, primarily driven by the Democratic Republic of Congo’s export ban and ERG’s invocation of force majeure, highlights significant supply concerns in the market. The government’s actions aiming to control oversupply underscore the challenges faced by producers and investors alike. This situation may lead to volatile cobalt prices as the anticipated review of export restrictions unfolds.

Original Source: www.mining.com