TRADE REVIEW: Asian cobalt market to see tight supply in Q3 amid DR Congo export ban extension

This report is part of the S&P Global Energy Metals Trade Review series, where we dig through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium, nickel and steel and scrap. We also explore what the next few months could bring, from supply and demand shifts to new arbitrages and quality spread fluctuations.

The Asian cobalt market may see support in the third quarter from potential supply tightness as inventory levels across the region draw down amid an extension of the ban on exports by the Democratic Republic of Congo. The magnitude of this support would depend on how quickly stocks outside the DRC are consumed. Demand for cobalt from the battery sector, however, is expected to remain subdued in Q3 amid the seasonal lull in China.

"We forecast the export ban extension will remove a further 51,000 mt of cobalt mine supply from the market in the short term, potentially supporting prices," according to an S&P Global Energy metals and mining analytics report. It added that "the export ban is not the end goal" and "until the export quota is established, market tightness is expected to persist, and the coming months will be crucial for policy clarity and inventory management."

Q2 cobalt hydroxide prices rangebound

Following the DRC's initial announcement of a four-month cobalt export ban, effective Feb. 22, cobalt hydroxide CIF China prices surged to $12.3/lb April 21, levels last seen late November 2022.

Prices began easing shortly after, leaving cobalt hydroxide rangebound at $11-$12/lb for most of Q2 as panic-buying slowed amid sufficient inventory levels outside the DRC. As of July 14, the Platts-assessed 30% Co hydroxide prices had more than doubled from a January low to $12.60/lb CIF China.

Market participants initially indicated offshore DRC inventories would last until July. However, given the weak demand for cobalt metal in Europe and the battery sector in Asia, stocks are now expected to be sufficient until October.

DRC's 3-month export ban extension

Although the market widely expected the DRC to transition to an export quota system, it announced June 21 a three-month extension of its suspension of cobalt exports, citing high stock levels.

Following this, IXM, a leading metals trading company owned by China's CMOC, declared force majeure on its cobalt supply contracts June 30. However, this had a limited impact on cobalt hydroxide prices, which hovered around $11.70/lb CIF China June 30, according to Platts data.

With the increase in copper mining, its byproduct, cobalt, is also expected to see a significant rise in output despite the export ban. CMOC reported Q1 cobalt metal production at its mining operations in the DRC rising 20.68% year over year to 30,414 mt.

The DRC is a major cobalt-producing country, expected to account for 72.8% of the total mined cobalt supply in 2025, according to Platts metals and mining data. Further export curbs will significantly impact cobalt supply planning, trade flows, and pricing, but would not help restore balance to market fundamentals.

China's imports decline

The DRC's cobalt supply made up 98.7% of China's cobalt hydroxide imports in 2024 at 620,365.8 mt. Following news of the ban, Chinese imports over January-May fell 6.73% year over year to 248,315 mt, according to Chinese Customs Data. S&P Global Energy metals and mining analysts suggest that "most of the exports that were shipped out of the DRC before the Feb. 22 ban have already arrived in China" and "new arrivals will start tightening."

Battery demand weighs on cobalt sulfate

Downstream, cobalt sulfate prices fluctuated at the start of Q2 amid mixed initial reactions to the export ban. However, prices began declining in the quarter's second half due to weak demand from the battery sector. Cobalt sulfate prices fell 10.1% to Yuan 44,500/mt ($6,203.9/mt) June 19 from its Q2 peak of Yuan 49,500/mt DDP China April 21.

Limited demand also pressured cobalt sulfate prices, with the share of nickel-manganese-cobalt batteries in the Chinese domestic market shrinking to 20% in 2025 compared with 31% in 2024.

In addition, the production levels and exports of Chinese mobile phones -- which predominantly use lithium-cobalt-oxide batteries containing about 55% cobalt -- fell 6.5% and 7.7%, respectively, year over year in January-May, China's Ministry of Industry and Information Technology data showed June 30. This is likely to contain near-term demand for cobalt sulfate, pressuring refiners' margins.

Platts assessed battery-grade 20.5% Co cobalt sulfate up 84.62% from Jan. 3 and up Yuan 300/mt day over day at Yuan 48,000/mt DDP China July 14.

Indonesia may fill supply gap

As stringent export policies by the DRC are expected to persist either through an extended export ban or a potential export quota, other cobalt-producing countries, such as Indonesia, could emerge as a supply chain cornerstone.

Indonesia is second to the DRC, accounting for 11.1% of the global mined cobalt supply in 2024, Platts data showed.

While Indonesia's existing supply may not be able to fill the supply gap left by the DRC, its cobalt-containing mixed hydroxide precipitate has been gaining interest as a cobalt feedstock alternative.

Indonesia's share of total mined cobalt supply is expected to triple by 2029, reaching 83,300 mt, according to Platts metals and mining data, while the DRC's share is expected to fall 22% by 2035 amid declining ore grades.