Cobalt prices have surged due to a Congolese export ban and ERG’s force majeure declaration. Prices rose nearly 12% on the Wuxi Stainless Steel Exchange, reaching highs not seen since October. The DRC’s government is reviewing the ban in three months, which may result in new export quotas as ERG’s operations are significantly impacted.
Cobalt prices surged due to supply concerns following the Democratic Republic of Congo’s ban on exports. Eurasian Resources Group (ERG) declared force majeure, indicating it cannot fulfill delivery obligations due to this export ban. Prices rose nearly 12% on China’s Wuxi Stainless Steel Exchange, reaching about 240 yuan per kg, which is the highest level since October. Furthermore, European prices increased to $12.25 per lb, up from $10.80 just days earlier, reflecting market sensitivity to the ban.
Last month, the Congolese government imposed a four-month export suspension to address oversupply issues that had previously driven prices down to nine-year lows. This has ignited fears of a tight market as ERG’s Metalkol operation accounts for about 9% of cobalt production in Congo, which is the largest global producer of cobalt, crucial for lithium-ion batteries in electric vehicles.
Traders noted that ERG’s declaration of force majeure played a role in increasing prices as suppliers in China refrained from selling, reinforcing market fears. ERG produced approximately 19,200 metric tons of cobalt in hydroxide last year, contributing significantly to global supply figures. The Congolese government is set to review this ban in three months, which could lead to negotiated export quotas during the suspension.
The recent surge in cobalt prices stems from a combination of an export ban in the DRC and associated supply fears, emphasized by ERG’s force majeure declaration. As traders adjust to these market changes, the cobalt landscape is poised for significant shifts, particularly in the lithium-ion battery market. Future developments over the coming months will greatly influence supply dynamics and price trajectories.
Original Source: www.mining.com
