The battery-grade raw material cobalt, which once dictated the price trends of NEV power batteries, seems to have stirred up a "storm" recently.
On March 5, Gasgoo Auto observed that Ganfeng LiEnergy, a domestic power battery producer, issued a customer notice stating that a civil war had erupted in the DRC, the world's largest cobalt mining region, leading to tight global cobalt supply and a significant price surge.
The company noted that, as a result, all cathode material suppliers had ceased quoting prices, making it impossible to place orders for cathode materials in the short term. The lithium battery industry is now facing challenges of rising costs and supply chain disruptions.
In response, Ganfeng LiEnergy is closely monitoring the situation and maintaining close communication with suppliers to ensure raw material supply. Meanwhile, the company has activated an emergency plan and is actively seeking diversified supply channels to mitigate supply chain risks.
Ganfeng LiEnergy stated: "To ensure stable supply, effective immediately, all new orders must have their prices reconfirmed. Please coordinate with our sales personnel for specific pricing. We also recommend that your company prepare procurement plans in advance and appropriately increase inventory to cope with potential supply fluctuations."
Gasgoo Auto believes that Ganfeng LiEnergy's notice of price recalibration for new orders is merely a microcosm of the industry's turbulence, reflecting the fragility and complexity of the entire lithium battery supply chain. However, after multiple rounds of fluctuations, whether cobalt prices can still influence the downstream changes in the battery industry remains uncertain.
Are "Cobalt Prices" Changing?
According to Xinhua Finance, on February 24, authorities in the DRC announced a four-month suspension of cobalt exports to address the global supply surplus in the cobalt market.
A statement issued by the Strategic Mineral Market Regulatory Authority of the DRC on the same day indicated that the country's Prime Minister and Minister of Mines had signed a decree allowing regulatory agencies to implement temporary measures, including export bans, to prevent market instability. This measure took effect on February 22.
The statement also mentioned that an evaluation would be conducted three months later, at which point the suspension might be adjusted or lifted based on the situation.
Additionally, eight departments, including the Ministry of Industry and Information Technology, recently issued the "Action Plan for High-Quality Development of New-Type ESS Manufacturing." The plan proposes increasing support for domestic exploration of lithium, cobalt, and nickel resources, scientifically and orderly granting mining rights, and enhancing domestic resource security.
Gasgoo Auto has learned that cobalt prices have shown a slight upward trend recently. As of February 24, the spot price of cobalt was approximately $45,000 per mt.
Subsequently, on February 25, the energy metals sector surged, with refined cobalt leading the gains. At that time, Hanrui Cobalt rose by over 13%, Tengyuan Cobalt by over 11%, while Ganfeng Lithium, Canmax, Huayou Cobalt, and Tibet Mining also followed with increases.
It is understood that the DRC plays a pivotal role in global cobalt supply. According to data from the Cobalt Institute, the DRC's cobalt production has long accounted for over 60% of global output.
Cobalt, as a critical raw material indispensable for lithium battery production, plays a key role in enhancing battery energy density and charge-discharge performance in ternary lithium battery cathode materials. When cobalt supply is disrupted due to civil unrest in the DRC, some analysts suggest that fluctuations in refined cobalt prices could directly impact the terminal prices of automotive power batteries.
Will Cobalt Prices Trigger a "Domino Effect"?
Furthermore, Gasgoo Auto has noticed that more than one lithium battery supplier has recently issued price increase notices.
Reports indicate that a certain manufacturer stated in a notice that the DRC government's announcement on February 24, 2025, to suspend cobalt exports for four months (the country's cobalt production accounted for 76% of global output in 2024) directly caused cobalt prices to soar, with LCO and ternary material prices also rising accordingly. Currently, most LCO producers have ceased quoting prices.
According to analyses and notices from various material producers, material prices are expected to continue rising in the coming months. Due to the sudden surge in cobalt/ternary raw material prices, all new orders will require reevaluation of unit prices starting March 3, 2025.
It is reported that LME cobalt prices fell from the historical high of $82,000 per mt in April 2022 to $21,000 per mt, marking the lowest level since the contract's launch in 2010.
For a time, statements from multiple producers seemed to suggest that cobalt prices were on the verge of significant changes. This inevitably brings to mind the prolonged "storm" cobalt prices once stirred in the new energy sector years ago.
However, does cobalt still possess the same "power" today?
According to a report by BMO Capital Markets analysts, the temporary ban could reduce cobalt market supply by approximately 65,000 mt. While this might push up spot prices in the short term, the impact is likely to be temporary as miners continue stockpiling cobalt.
Additionally, some research reports indicate that the actual demand in the cobalt salt market has shown no highlights recently, with downstream purchasing interest remaining low. Market transactions have not provided strong support for the trend, and market participants remain pessimistic about the outlook. Coupled with the recent weakening of intermediate product prices, the cobalt salt market currently lacks upward momentum, and its short-term trend is expected to fluctuate downward.
Overall, the cobalt market lacks upward momentum, while downward pressure persists.
