DRC cobalt ban disrupts market, refined cobalt quotes rise over 46% in H1. How is the current market performing? [Weekly Observation]

SMM News on July 4: In the second week after the DRC announced the extension of the ban, except for Co3O4, the spot prices of other cobalt metals continued to rise. Refined cobalt prices increased by 1,500 yuan/mt in a single week, and it led the way among major metals in H1 with a remarkable 46.19% increase. SMM has compiled the price changes in the cobalt market this week, as detailed below:

Refined Cobalt:

According to SMM's spot quotes, refined cobalt spot prices showed an upward trend this week, rising by 500 yuan/mt per day over the three trading days from July 1 to July 3. As of July 4, refined cobalt spot prices rose to 243,000-258,500 yuan/mt, with an average price of 250,750 yuan/mt, up 1,500 yuan/mt or 0.6% from June 27.

》Check SMM's spot quotes for cobalt and lithium

From the supply and demand perspective, SMM learned that on the supply side, refined cobalt smelters maintained long-term contract supplies, with fewer spot quotes. Traders had limited low-priced inventory, leading to an increase in low-end quotes. Some traders reported that the ex-factory prices of a certain high-end brand had increased, and traders followed suit by refusing to budge on prices. However, due to weak purchase willingness from downstream buyers, the market transaction prices gradually fell below the producers' ex-factory prices. On the demand side, due to the still high social inventory of refined cobalt and no significant improvement in downstream demand, most downstream producers maintained just-in-time procurement rhythms, with actual transactions remaining weak.SMM expects that refined cobalt prices will continue to maintain a fluctuating trend in the short term.

Cobalt Salts (Cobalt Sulphate and Cobalt Chloride):

Cobalt Sulphate:

In terms of cobalt sulphate, according to SMM's spot quotes, cobalt sulphate spot prices also showed an upward trend this week. As of July 4, cobalt sulphate spot prices rose to 48,700-50,600 yuan/mt, with an average price of 49,650 yuan/mt, up 650 yuan/mt or 1.33% from June 27.

》Check SMM's spot quotes for cobalt and lithium

From the supply and demand perspective, SMM learned that on the supply side, a certain miner announced force majeure this week, leading to further increases in quotes for new inventory from most smelters and traders. Some smelters and traders reported transactions of older inventory at lower prices. On the demand side, orders from downstream ternary and Co3O4 enterprises still showed no significant improvement, with the downstream market adopting a wait-and-see attitude, focusing on digesting previous inventory. Purchases of refined cobalt remained suspended due to its poor economic viability.

Overall, amid the current uncertain situation, there is a significant price divergence between buyers and sellers in the market. Upstream producers insist on refusing to budge on prices, while downstream buyers have weak purchase willingness, resulting in limited actual transactions in the market. SMM expects cobalt sulphate prices may maintain fluctuating trend next week, pending feedback from actual market transactions.

Cobalt chloride side:

For cobalt chloride, according to SMM spot quotations, this weekcobalt chloridespot prices fluctuated frequently. As of July 4, cobalt chloride spot prices rose to 60,650-62,600 yuan/mt, with the average price at 61,625 yuan/mt, up 400 yuan/mt (0.65%) from June 27.

SMM learned the cobalt chloride market remained sluggish this week with only limited transactions. Supply side, smelters maintained strong wait-and-see sentiment with few deals concluded. Demand side, downstream enterprises held relatively sufficient inventory levels, actively inquiring but remaining cautious in trading. Price-wise, while upstream smelters offered higher quotations, actual transaction prices stayed around 61,000 yuan/mt, with few deals concluded at 62,000 yuan/mt.Cobalt chloride prices are expected to remain stable in the 6.1-6.2 range in the short term.

Co3O4 side:

SMM spot quotations showed Co3O4 spot prices reversed downward this week. As of July 4, Co3O4 spot prices fell to 201,000-207,000 yuan/mt, averaging 204,000 yuan/mt, down 200 yuan/mt (0.1%) from June 27.

SMM learned current Co3O4 market offers ranged between 200,000-220,000 yuan/mt, with both upstream and downstream adopting wait-and-see attitudes. Few spot transactions occurred, mostly long-term contract deliveries. Supply side, Co3O4 smelters chose to observe overall market sentiment and demand, releasing limited cargoes. Demand side, LCO cathode plants held relatively low inventory but recent market sentiment significantly influenced procurement decisions. Price-wise, Co3O4 producers indicated expected selling prices between 210,000-220,000 yuan/mt, though high-priced transactions remained scarce.Long-term, Co3O4 prices will still be affected by cobalt inventory levels, with whether current industry inventory can sustain through December becoming a key pricing factor.

Market news:H1 2025 has passed, with spot price performances of various metals already finalized. According to SMM's H1 2025 metal market review, refined cobalt led with a staggering 46.19% price increase, becoming the semi-annual "frontrunner" in metal spot markets. Historical SMM data showed refined cobalt's average spot price reached 249,250 yuan/mt as of June 30, up 78,750 yuan/mt from 170,500 yuan/mt at the end of 2024.

Market analysis indicates H1 cobalt price increases mainly resulted from supply disruptions. The DRC government's February 22 announcement of a four-month cobalt export suspension significantly impacted markets. As the world's primary cobalt producer with abundant resources, DRC's supply is crucial, while China - one of the largest global cobalt consumers - remains highly dependent on DRC-sourced raw materials.

Therefore, as soon as the news broke that DRC had suspended its cobalt export ban, the market reacted swiftly, with a certain reluctance to budge on prices emerging. Coupled with the recovery of downstream demand after the Chinese New Year, spot transactions were boosted. Consequently, spot quotes for refined cobalt rebounded and rose in late February.

Entering March, the impact of DRC's policy continued to ferment, with heavy market panic. Smelters generally held onto their inventory and refused to budge on prices, while downstream buyers showed some panic and engaged in a small amount of restocking. Additionally, some traders had strong speculative sentiment, boosting spot transactions. As a result, spot prices for refined cobalt in March rose strongly. From April to May, as the prices of cobalt intermediate products increased, the economic viability of refined cobalt production further declined. Some producers had low willingness to sell and even implemented production cuts. This situation persisted until May, with downstream buyers maintaining just-in-time restocking. However, in April, due to market expectations of a potential continuous decline in the subsequent supply of refined cobalt, panic sentiment slightly increased, driving a slight rise in spot prices for refined cobalt.

Entering June, on the evening of June 21st, the DRC government extended the cobalt export ban for another three months. The unexpected market news led to a recovery in market sentiment. Refined cobalt producers and traders returned to refusing to budge on prices, driving an overall rebound and fluctuation in cobalt prices in June. However, it should be noted that due to the accumulation of a large amount of refined cobalt inventory in society during the price rebound at the beginning of the year, even with significant positive news, downstream buyers still maintained just-in-time restocking pace, and no large-scale restocking has been observed.

Looking ahead to the refined cobalt market in July, SMM predicts that considering the prices of cobalt intermediate products are still maintaining a strong fluctuating trend and the further deterioration of the economic viability of smelter production, it is expected that production cuts may continue, providing support for refined cobalt prices. However, attention should still be paid to downstream restocking conditions. Under weak recovery, SMM predicts that spot prices for refined cobalt may maintain a fluctuating trend.