Cobalt prices have witnessed a significant increase as China continues its strategic buying efforts amid concerns regarding potential export bans from the Democratic Republic of Congo (DRC), the world's leading supplier of cobalt. On Monday, March 24, 2025, cobalt futures prices in China surged more than 9%, highlighting renewed interest in the metal.
The rise in prices is attributed to various factors, including robust inquiries by China's National Food and Strategic Reserves Administration, which has been actively engaging in price inquiries and bidding for cobalt, copper, nickel, and lithium, as reported by Bloomberg News. These inquiries reportedly took place on Friday, March 21, 2025, though specific details regarding the volumes or timing remain vague.
Since February 2025, cobalt prices on China's Wuxi Stainless Steel Exchange have skyrocketed by 55%, a response to increased demand amidst supply concerns. The DRC, which implemented a four-month export ban on cobalt at the beginning of February, is now considering an extension of that ban. Government spokesperson Patrick Muyaya mentioned last Friday that an extension of the ban is a possibility due to a significant drop in cobalt prices.
In December 2024, cobalt prices had dropped sharply, prompting the DRC government to impose the ban to stabilize the market and curb the global supply glut. The DRC's strategy was aimed at ensuring both local producers and international stakeholders could benefit from a more balanced market.
The export restrictions placed on cobalt have raised alarms in industries reliant on the metal, particularly the battery and electronics sectors. As electric vehicles become increasingly popular, the demand for cobalt—an essential component for lithium-ion batteries—continues to grow. This growing demand, juxtaposed against potential export limits from the DRC, has kept market participants on high alert.
Experts in the market now speculate what the future might hold as China’s buying actions may signal a strategy to build stockpiles amid uncertainty. This approach could potentially lead to prolonged price increases if DRC's export restrictions materialize. With a relatively tight market, the role of the DRC as a major supplier will be crucial in shaping global prices.
Overall, the interplay of strategic stockpiling by China, combined with ongoing supply stipulations from the DRC, creates a complex situation for cobalt's future prices. Industry watchers are keen to see how these factors will unfold in the coming months, potentially impacting various sectors connected to the metals market.
