The suspension of cobalt exports by the Democratic Republic of the Congo (DRC) has bolstered the cobalt market, as well as pushed up prices of nickel products.
The DRC suspended cobalt exports for four months effective from 22 February, although cobalt production is likely to remain at normal levels. The news sparked concerns in the market because the DRC is the world's largest cobalt producer, accounting for 75pc of total cobalt output. Market sentiment shored up, with prices of several cobalt and non-cobalt products surging to annual highs.
Argus-assessed Chinese prices for 99.8pc grade cobalt metal stood at 235-255 yuan/kg ($32.49-35.26/kg) ex-works on 13 March, the highest level in almost 1.5 years, while Argus cif China assessment for 30pc grade cobalt hydroxide hit a two-year high of $9.50-10.80/lb cif China on the same day.
Cobalt prices are expected to remain buoyant if the ban is extended, given DRC's majority share of global cobalt supply. But other products such as nickel sulphate and mixed-hydroxide-precipitate (MHP) also stand to gain from the ban.
Argus-assessed Chinese nickel sulphate ex-works prices rose to a five-month high of Yn27,300-28,000/t on 13 March, partly supported by the ban because cobalt sulphate is a by-product of nickel sulphate production, while the Indonesian Nickel Index (INI) for 2-5pc cobalt payable in MHP surged to a record high of $154.80/metric tonne unit (mtu) on 14 March.
Indonesia, the world's second-largest cobalt producer, is expected to benefit from the ban given the expansion of its MHP capacity.
Market views on the ban were mixed, with some participants expecting prices to continue increasing owing to tighter cobalt supply. But others were less concerned, noting that there was abundant cobalt material outside of the DRC. Participants continued to closely monitor the market for further developments, with speculation on a possible extension of the ban and potential export quotas that could follow.
