Cobalt Prices Surge Amid Supply Concerns Following Congo Export Ban

Cobalt prices rose sharply due to fears over supply following a Congo export ban. ERG’s declaration of force majeure contributed to the price surge, highlighting the seriousness of supply issues. The ban will be revisited in three months, with possible introduction of export quotas.

On Monday, cobalt prices surged dramatically due to supply uncertainties triggered by the Democratic Republic of Congo’s ban on cobalt exports. Eurasian Resources Group (ERG) declared force majeure on its deliveries, leading to a near 12% price increase to approximately 240 yuan per kg in China – the highest rate since October. In Europe, prices rose from $10.80 to $12.25 per lb within a few days, highlighting the market’s rapid response to these developments.

The Congolese government has placed a four-month ban on cobalt exports to address oversupply issues that previously resulted in nine-year low prices. With ERG’s declaration of force majeure cited as a key factor in the price increase, analysts note that this has heightened awareness among traders regarding the seriousness of the situation. According to reports, ERG’s Metalkol operation significantly contributes to Congo’s total cobalt production.

The government’s ban will be evaluated in three months, during which possible export quotas may be introduced based on forthcoming negotiations. Other major players in the cobalt market include Glencore and CMOC Group, both of which have significant operations in Congo. The future of cobalt prices will depend on how these supply-side constraints evolve and whether the new quotas impact the market.

In summary, cobalt prices have surged due to a recent export ban by the Democratic Republic of Congo, compounded by ERG’s force majeure declaration. These developments signal a tightening cobalt supply, prompting price increases both in China and Europe. With an evaluation period set for the ban, market stakeholders are keenly monitoring the situation as it unfolds.

Original Source: www.mining.com