DRC Halts Cobalt Exports to Combat Falling Prices

DRC Halts Cobalt Exports for Four Months. The Democratic Republic of Congo, the largest global cobalt producer, is suspending all cobalt exports for four months to address oversupply issues and stabilize prices. This decision could impact industry dynamics significantly.

Date: 27-02-2025

AI Rating: 6

Market Impact of DRC's Export Suspension

The Democratic Republic of Congo (DRC) has halted all exports of cobalt for four months. This key battery metal's market is significantly affected by supply and demand dynamics. Currently, the DRC produces about three-quarters of the world's cobalt. The government's decree aims to stabilize prices, which have plummeted recently due to excessive supply driven by increased production from companies like CMOC Group. This suspension is a strategic move to prevent further drops in cobalt prices, which fell below US$10 per pound.

Supply Issues and Government Response

Patrick Luabeya, president of the Authority for the Regulation and Control of Strategic Mineral Substances' Markets, emphasized the urgent need to align exports with global demand. The suspension reflects an effort to curb the serious threat posed by oversupply to both domestic and international investors, signaling the government's commitment to preserve the country's economic stability and investor confidence.

CMOC Group has aggressively ramped up cobalt production, exceeding production targets significantly. In contrast, Glencore has had to cut production targets due to weak market conditions and accumulated stockpiles. This contrasting approach highlights the ongoing market instability and potential competitive advantages.

The situation is dynamic, with the DRC scheduled to review the export ban in three months, indicating the government is keeping a close eye on market conditions. Investor sentiment may fluctuate based on updates from this review. Overall, these decisions are critical in shaping future supply chains and market pricing for cobalt.

Stocks: CMCLF GLCNF