Cobalt Prices Surge Amid Supply Concerns Following DRC Export Ban

Cobalt prices surged due to supply fears following a DRC export ban. ERG declared force majeure on deliveries, causing prices to spike nearly 12% to 240 yuan/kg. European cobalt prices also rose significantly. The Congo export ban is set for review in three months, potentially leading to quotas.

Cobalt prices surged following supply concerns stemming from a Democratic Republic of Congo export ban. Eurasian Resources Group (ERG) announced force majeure on deliveries due to this export restriction, escalating fears of a shortage. Prices jumped nearly 12% to roughly 240 yuan per kg on China’s Wuxi Stainless Steel Exchange, marking the highest level since October.

European cobalt prices also experienced a significant increase, with standard grade cobalt in Rotterdam rising to $12.25 per lb as of March 7, up from $10.80 on March 4 and $9.95 on February 24, as reported by Fastmarkets. The Congolese government suspended cobalt exports for four months to address oversupply issues that pushed prices to nine-year lows around $10 per lb.

As a key player, ERG’s Metalkol operation is responsible for about 9% of Congo’s total cobalt production and approximately 7% of global cobalt supply. The export ban is under review and may lead to quotas that need negotiation, indicating potential changes in the export landscape moving forward. Notable competitors in cobalt production include Glencore and the CMOC Group from China.

In summary, cobalt prices have sharply increased due to export bans in the Democratic Republic of Congo, which has caused supply concerns. The announced force majeure by ERG has prompted traders to reassess their strategies, leading to surging prices both in China and Europe. The possibility of future export quotas hints at further changes in the cobalt market.

Original Source: www.mining.com