China’s Unwrought Cobalt Exports and Imports Decline in May 2025

China's Unwrought Cobalt Trade: May 2025 Analysis

China's unwrought cobalt market experienced significant shifts in May 2025, with both imports and exports declining month-on-month while maintaining strong year-on-year growth. The data reveals China's evolving role as a global cobalt processing hub, transforming imported raw materials into value-added exports for the burgeoning battery and technology sectors worldwide.

What Happened to China's Cobalt Trade in May 2025?

May 2025 saw a notable temporary cooling in China's unwrought cobalt exports and imports compared to April, though the longer-term growth trajectory remains robust. According to Shanghai Metal Market (SMM) data, both import and export figures decreased substantially from the previous month while showing remarkable year-on-year expansion.

Key Trade Figures for May 2025

• Imports: 651 metric tons (metal content)
  • 23% decrease month-on-month
  • 189% increase year-on-year
• Exports: 2,986 metric tons (metal content)
  • 27% decrease month-on-month
  • 433% increase year-on-year

These figures underscore China's position as a net exporter of unwrought cobalt, with export volumes exceeding imports by a factor of nearly 4.6 in May alone.

Price Movements

The price data tells an equally compelling story about market dynamics:

• Average Import Price: $30,306/mt (metal content)
  • 12.96% increase month-on-month
• Average Export Price: $32,302/mt (metal content)
  • 3.80% increase month-on-month

The significant price spread of $1,996/mt between imports and exports reflects the value addition occurring within China's processing infrastructure. More revealing is that import prices rose at a much faster rate than export prices, suggesting tightening upstream supply despite softening demand.

"The divergence between import and export price trajectories highlights China's strategic advantage in cobalt processing. While paying more for raw materials, China maintained relatively stable export pricing to preserve market share," notes SMM analyst Wang Cong.

How Has China's Cobalt Trade Performed in 2025 So Far?

The first five months of 2025 reveal an extraordinary growth pattern in China's cobalt trade compared to the same period in 2024. This acceleration appears linked to the global critical minerals energy transition and expanding battery production capacity.

Year-to-Date Performance (January-May 2025)

• Total Imports: 2,990 metric tons (metal content)
  • 178.4% increase year-on-year
• Total Exports: 10,383 metric tons (metal content)
  • 232.68% increase year-on-year

The cumulative export-to-import ratio of 3.47:1 for January-May 2025 confirms China's strategic positioning as a value-adding processor rather than merely a consumer of unwrought cobalt.

Quarterly Trade Pattern Analysis

Breaking down the year-to-date figures reveals an interesting quarterly pattern:

This data shows an accelerating trend in China's net export position, with the export-to-import ratio rising from 2.94 in Q1 to 4.32 in the April-May period, indicating growing efficiency in China's cobalt processing operations or strategic release of stockpiled material.

What's Driving China's Cobalt Export Growth?

The extraordinary 433% year-on-year increase in May exports and 232.68% growth in year-to-date volumes can be attributed to multiple converging factors, both demand-driven and supply-chain strategic.

Global Demand Factors

• Battery Manufacturing Expansion: According to the International Energy Agency's 2025 Q1 report, global electric vehicle production increased 68% year-on-year, driving unprecedented demand for cobalt-containing cathode materials. Chinese battery manufacturers like CATL expanded production capacity by 45% in 2024, requiring significantly more cobalt inputs.

• Energy Storage Systems: Grid-scale storage deployments grew 127% globally in 2024 according to BloombergNEF, with many systems still utilizing cobalt-based NMC chemistries for their stability and energy density advantages.

• Consumer Electronics: Post-pandemic upgrade cycles and AI-enhanced devices drove a 23% increase in premium device sales in Q1 2025 (IDC Data), maintaining pressure on cobalt supply chains.

Supply Chain Positioning

China's strategic approach to cobalt processing represents a deliberate industrial policy aimed at capturing more of the value chain:

• Value-Added Processing: China has invested heavily in refining capacity, converting lower-value cobalt hydroxide (primarily imported from the Democratic Republic of Congo) into high-value unwrought cobalt and cobalt compounds. The Cobalt Institute estimates that China now controls 72% of global cobalt refining capacity.

• Stockpile Management: The Chinese State Reserve Bureau accumulated significant cobalt reserves during 2023-2024 when prices were lower. Industry analysts suggest that some of 2025's export surge may represent strategic release of these stockpiles amid favorable pricing.

"China's dominance in cobalt processing creates a unique arbitrage opportunity. By securing primary supply from the DRC and converting it to battery-grade materials, Chinese refiners can capture margins at multiple stages of the value chain," explains Ma Rui, metals strategist at SMM.

Why Did May See a Month-on-Month Decline in Trade?

Despite the strong year-on-year growth, both imports (-23%) and exports (-27%) declined significantly from April levels. This temporary cooling has several potential explanations.

Market Cooling Factors

• Seasonal Demand Fluctuations: Historical trade data shows that Q2 often experiences a mid-quarter lull in battery material procurement. Battery manufacturers typically frontload purchases in early Q2 before a summer manufacturing peak.

• Price Sensitivity: The 12.96% month-on-month jump in import prices likely suppressed buying enthusiasm. CRU Group analysis indicates that Chinese buyers typically become hesitant when prices rise more than 10% in a single month.

• Supply Chain Adjustments: Following exceptionally strong activity in Q1 and April, many battery manufacturers entered a phase of inventory rebalancing. Benchmark Mineral Intelligence noted that cathode producers operated at 79% capacity utilization in May, down from 86% in April.

Economic Indicators

• Manufacturing PMI Influence: China's official Manufacturing PMI fell to 50.2 in May from 50.8 in April, indicating slowing growth in the industrial sector. Historically, metals imports show a 0.7 correlation coefficient with PMI changes.

• Currency Exchange Impacts: The Chinese yuan depreciated 1.2% against the US dollar in May, making dollar-denominated imports more expensive and potentially contributing to the observed import volume decline.

What Do Price Trends Reveal About Market Conditions?

The divergent price movements between imports and exports provide critical insights into market dynamics and China's strategic positioning.

Price-Volume Relationship

• Import Price Premium: The 12.96% month-on-month increase in import prices despite a 23% volume decline suggests significant supply constraints in raw cobalt materials. This contradicts typical economic expectations where lower demand should moderate prices.

• Export Price Stability: The more modest 3.80% increase in export prices indicates China's strategic decision to maintain competitiveness in global markets, potentially absorbing some of the raw material cost increases.

Market Sentiment Analysis

• Price Divergence: The growing gap between import and export prices (from $1,240/mt in April to $1,996/mt in May) highlights China's strengthening position in the value chain. This "processing premium" has expanded 60.9% in a single month.

• Forward Price Indicators: Shanghai Futures Exchange (SHFE) cobalt contracts for September delivery traded at a 5.3% premium over spot prices in late May, suggesting market expectations of continued upward price pressure.

How Does China's Position Compare to Global Cobalt Trade?

China's dominance in cobalt processing and its growing export volumes are reshaping global supply chains in ways that have significant implications for battery manufacturers and EV producers worldwide.

Market Share Dynamics

• Export Dominance: UN Comtrade data for 2024 shows China accounted for 66% of global unwrought cobalt exports by value, up from 58% in 2023. The 2025 year-to-date growth suggests this share will expand further.

• Regional Trade Flows: Export destination analysis reveals that South Korea and Japan collectively received 47% of China's unwrought cobalt exports in Q1 2025, driven by their expanding battery production for automakers. European destinations accounted for 28%, while North America received 17%.

• Competition Analysis: Finland's cobalt exports (primarily from Freeport Cobalt operations) grew only 18% year-on-year in Q1 2025, significantly underperforming China's 232.68% growth rate, indicating market share losses to Chinese producers.

Strategic Implications

• Supply Chain Security: The U.S. Department of Energy's 2025 Critical Materials Assessment highlighted that 83% of cobalt used in U.S. battery manufacturing now passes through Chinese refineries at some point in the supply chain, creating potential vulnerabilities.

• Market Influence: China's trade decisions now have outsized effects on global cobalt pricing. When Chinese exports dropped 27% in May, LME cobalt prices rose 8.4% in the following week despite limited changes in mine production.

What Can We Expect for the Remainder of 2025?

While forecasting remains challenging in volatile commodity markets, several indicators provide insights into likely developments for China's cobalt trade through the rest of 2025.

Forecast Indicators

• Seasonal Patterns: Historical analysis shows that H2 typically sees 15-20% higher cobalt trade volumes than H1. If this pattern holds, China could export approximately 12,000-13,000 metric tons in H2 2025.

• Demand Projections: The IEA's Q2 2025 forecast projects 88% year-on-year growth in global EV sales for H2, suggesting continued strong pull for battery metals investment 2025 including cobalt.

• Supply Constraints: CRU Group's H2 2025 cobalt market outlook anticipates a 7,000-ton global deficit as new mine projects face continued delays in the DRC and Indonesia. This could impact operations at the Halls Creek cobalt project and other developments worldwide.

Market Monitoring Factors

• Price Sensitivity Thresholds: Historical trade data suggests Chinese export volumes typically decline when prices exceed $35,000/mt for more than two consecutive months—a level that could be tested in Q3 based on current trajectories.

• Policy Influences: The EU Critical Raw Materials Act implementation in October 2025 could impact trade flows as European buyers seek to diversify supply chains beyond China. However, limited alternative processing capacity suggests continued reliance on Chinese exports in the near term. The new European CRM facility insights suggest this transition may be challenging.

Disclaimer: The forecasts presented are based on current market conditions and historical patterns. Actual outcomes may vary significantly due to policy changes, technological disruptions, or unforeseen supply chain developments.

FAQ: China's Cobalt Trade Dynamics

What is unwrought cobalt and how is it used?

Unwrought cobalt refers to cobalt metal that hasn't been fabricated into finished products, typically in the form of cathodes, briquettes, rounds, or powder. According to the Cobalt Institute's classifications, it contains minimum 99.8% cobalt content and serves as:

• A critical component in lithium-ion battery cathodes (particularly NMC and NCA chemistries)
• An essential ingredient in superalloys for jet engines and gas turbines
• A binder metal in cutting tools and hard-facing applications
• A catalyst in petroleum refining and chemical processes

Why is China both importing and exporting cobalt?

China's dual-direction trade reflects its strategic position in the global cobalt value chain:

• Imports: China primarily imports cobalt hydroxide and other intermediate products from mining operations in the DRC (accounting for 74% of its imports in 2024)
• Exports: After refining these materials into higher-purity unwrought cobalt and chemical compounds, China exports value-added products to battery and alloy manufacturers worldwide

This approach allows China to capture more of the processing margin while meeting specific grade requirements for different international markets. The China Nonferrous Metals Industry Association estimates this strategy added $1.2 billion to China's cobalt sector value in 2024.

How do cobalt trade patterns affect global battery production?

China's position as the dominant cobalt processor creates several impacts:

• Price Transmission: Changes in Chinese export volumes can cause price volatility throughout the battery supply chain, with Benchmark Mineral Intelligence estimating that a 10% reduction in Chinese exports correlates with a 4-6% increase in battery cell costs.

• Supply Security: Battery manufacturers outside China face potential vulnerability, as Zhejiang Huayou Cobalt and Jinchuan Group alone control approximately 45% of global refined cobalt output.

• Chemistry Decisions: The pricing and availability of Chinese cobalt exports influence battery chemistry selection, with several Korean and Japanese manufacturers citing cobalt supply concerns as a factor in accelerating shifts toward LFP chemistries.

What factors might reverse the current trade trends?

Several developments could alter current patterns:

• New Processing Capacity: Projects like Glencore's Mutanda cobalt hydroxide refinery expansion and Terrafame's battery chemicals plant in Finland could reduce reliance on Chinese processing.

• Technological Shifts: Continued adoption of cobalt-reduced or cobalt-free battery chemistries could diminish overall demand, with Tesla reporting in Q1 2025 that 67% of its vehicles now use LFP batteries.

• Policy Interventions: Implementation of the U.S. Inflation Reduction Act and EU Critical Materials Act could redirect supply chains, though limited processing alternatives may slow such transitions.

• DRC Beneficiation Requirements: The DRC government's policy requiring more in-country processing could eventually reduce China's access to raw cobalt feedstock if fully implemented. Environmental concerns similar to the recent Barrick cobalt discharge fine could also impact future supply chains.

The Broader Implications of China's Cobalt Trade Position

China's strategic approach to cobalt processing exemplifies its broader industrial policy in critical minerals. By controlling key nodes in the battery supply chain, China maintains significant influence over the global energy transition despite limited domestic cobalt resources.

The volatility observed in May 2025—with volumes declining but prices rising—highlights the delicate balance in global cobalt markets. As battery demand continues its exponential growth trajectory, China's trade decisions will remain crucial indicators for the energy storage industry, automotive manufacturers, and resource security strategists worldwide.

Disclaimer: This analysis is based on current market data and should not be considered investment advice. Commodity markets are subject to rapid changes due to geopolitical events, technological developments, and policy interventions that may significantly alter projected outcomes.

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