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Metals & Mining Theme, Non-Ferrous
April 15, 2025
By Litian Wang and Samantha Beh
HIGHLIGHTS
Cobalt hydroxide prices surge to $12/lb in March amid Congo export ban
Cobalt sulfate offers break above Yuan 50,000/mt since ban
Quota-based system likely to replace ban
This report is part of the S&P Global Commodity Insights' 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 to quality spread fluctuations.
The ongoing uncertainty over the Democratic Republic of Congo's export ban on cobalt is expected to continue supporting prices in the second quarter of 2025 amid supply remaining tight and a cautious market.
In the medium to long term, prices may face downward pressure from weak demand for consumer electronics and nickel-manganese-cobalt (NMC) batteries, potential cobalt stock releases post-export ban, US tariffs and increased cobalt supply from Indonesia's expanding mixed hydroxide precipitate (MHP), which contains about 5% cobalt.
Platts, part of S&P Global Commodity Insights, assessed cobalt hydroxide prices at a record low of $5.60/lb Jan. 23, the lowest since Platts began the assessment in May 2020, driven by steady supply growth from the DRC and persistent sluggish demand from downstream sectors.
Following the DRC's announcement of a four-month cobalt export ban, effective Feb. 22, Platts assessed cobalt hydroxide prices surging to a 28-month high of $12/lb on March 19, more than double from the January low.
The ban is scheduled for a review in May.
Term contracts continued to be fulfilled since the ban, although some delays are expected starting April. Spot supply tightened after the ban as sellers withheld offers in anticipation of further price increases.
Inventories in China were reportedly sufficient to meet two to four months of demand following the ban.
The short-term market outlook might remain bullish in Q2 on tight spot supply and ongoing uncertainty about the DRC's policy.
Platts-assessed 30% Co hydroxide more than doubled from the January low at $11.50/lb CIF China April 10.
Cobalt sulfate prices started first-quarter 2025 on a bearish note, with Platts assessing prices at a low of Yuan 26,000/mt Jan. 2 and rangebound at Yuan 25,500-26,000/mt until late February.
Prices rebounded due to the DRC's export ban, with offers soaring to over Yuan 50,000/mt in March, particularly for fresh materials compared to older and caked materials.
The Platts-assessed cobalt sulfate price spiked 93% from Feb. 24 to Yuan 50,000/mt March 18 after the export ban took effect. This also marked a record high for cobalt sulfate since Dec. 20, 2022, when prices stood at Yuan 50,000/mt.
Following the price surge, buyers mostly shied away, with only those facing urgent material needs willing to accept the elevated price levels.
Since the DRC announcement, market sources indicated sufficient existing inventories in China for short-term demand, similar to cobalt hydroxide. Cobalt salts can still be sourced from MHP or recycled cobalt sulfate in the spot market, sources said.
By late March, cobalt sulfate prices started softening due to the slowing domestic China market and limited transactions as market participants remained cautious against further price falls.
Platts assessed battery-grade 20.5% Co cobalt sulfate up 83.46% from Jan. 3 but flat day over day at Yuan 47,700/mt DDP China April 10.
Potential raw material shortage concerns and alternative growing demand from cobalt tetroxide producers using cobalt sulfate as feedstock initially drove cobalt purchases in Q1.
Overall Q1 demand, however, remained weak due to a slowdown in consumption from consumer electronics and NMC batteries. Chinese producers noted regular inquiries from buyers but no significant improvement in the supply and demand fundamentals of cobalt sulfate.
Exports of Chinese mobile phones, which predominantly use lithium-cobalt-oxide batteries containing about 55% cobalt, fell 11.7% year over year in January and February, China's Ministry of Industry and Information Technology data showed March 31.
Falling interest from the NMC battery sector, which continues to face competition from lithium iron phosphate (LFP) batteries, also added pressure on cobalt sulfate prices in Q1.
LFP batteries accounted for 93.8 GWh of power battery sales in China in February, marking a 90.5% year-over-year increase, while NMC sales reached only 35.8 GWh, up 3.2% year over year, China Automotive Battery Innovation Alliance data showed March 11.
"Looking ahead, the market's future will largely depend on whether supply and demand can align. Otherwise, prices could plummet very rapidly," a cobalt sulfate producer said about the Q2 market outlook.
The DRC is currently exploring the option of selling cobalt on a quota basis as a temporary measure to manage oversupply and support prices after the ban is lifted.
"A quota system to control total export volume may be the best way to support a sustained higher price. The key questions to follow will be centered around designating the appropriate quota volume and how to assign the quota," Alice Yu, principal analyst at S&P Global Commodity Insights' Metals & Mining Research team, said.
Yu added the release of stockpiled cobalt stock is likely to lead to excess downside risk to cobalt prices when the ban is lifted.
Indonesia's cobalt output is expected to rise 40% year over year to 41,918 mt in 2025, adding to supply pressure, analyst Yu said, adding that a global surplus of 51,000 mt is forecast in 2025, down from 56,000 mt in 2024.
The market is currently adopting a wait-and-see approach after the US' reciprocal tariffs on April 2, as market participants assess the potential impact on trade dynamics and commodity prices.
"The sales side has reported strong signals of demand change from customers, and we have suspended our procurement this week," a major NMC battery cathode maker in China said.