DRC's cobalt export control likely to help cobalt price bottom out

创建于03.20

At present, the Democratic Republic of Congo (DRC) has halted the export of cobalt intermediates startomg early March. The market players believe that there is a high probability that DRC will introduce an export quota system, which could lead to a reduction in the export of cobalt intermediates from the country.

There is a divergence in price trends and corporate perspectives across the cobalt industry chain. On the demand side, alloys and ternary precursors producers react negatively towards the price hike. And there is a significant gap between bids and offers for cobalt sulfate. As for Co3O4, Mysteel has observed some shipment due to low inventory held by LCO manufacturers and they only use Co3O4 produced by cobalt intermediates. Currently, the electrolytic cobalt and cobalt sulfate market sentiment has cooled, while cobalt chloride and Co3O4 prices have shown signs of stabilizing. The cobalt ntermediates prices, on the other hand, will likely remain high with a slight upward trend.

Over the past two years, the growth rate of cobalt demand has been slow, and the follow-up regulations to be introduced by DRC is estimated to put an end to the downtrend of cobalt price in the past two years. That is, the market players shoud still pay attention to the specific policy measures of the DRC in the future.

And industrial integration is unlikely to be a key for the mining companies to mitigate the risks from price volatility in the face of overcapacity in the cobalt processing sector and weak downstream demand. Therefore, most cobalt miners are not considering expansion to downstream markets, with only a few exceptions pursuing diversification in the context of cobalt oversupply. At present, most mining companies are opting to lock in profits by processing cobalt products on behalf of others.