Futures and Spot Refined Cobalt Prices Rise Amid DRC Export Ban

How Are DRC Export Policies Affecting Global Cobalt Prices?

The cobalt market has experienced significant price volatility in June 2025, with both futures and spot refined cobalt prices rising simultaneously. This upward trend has been primarily triggered by the Democratic Republic of Congo's (DRC) decision to extend its export ban on cobalt raw materials. As the world's dominant cobalt producer—accounting for approximately 70% of global cobalt production—the DRC's policy decisions create immediate ripple effects throughout the global supply chain.

Despite the bullish sentiment in pricing, actual transaction volumes remain suppressed due to high inventory levels in the midstream sector and cautious buyer behavior. The disconnect between price movements and transaction activity highlights the complex market dynamics at play.

Market Response to DRC Policy Extension

The extension of export restrictions in the DRC has created immediate upward pressure on cobalt prices across various forms. Futures prices on the Zhonglianjin platform jumped significantly within days of the announcement, while spot prices for refined cobalt followed suit.

This policy change has particularly affected:

• Futures market prices on the Zhonglianjin platform
• Spot prices for refined cobalt
• Prices for intermediate cobalt products
• Derived cobalt compounds including sulphate, chloride, and oxide

"After observing the market for several trading days, traders gradually resumed quotations and maintained a refusal to budge on prices," noted analysts at Shanghai Metal Market (SMM) in their June 27, 2025 Cobalt Morning Meeting.

The market response has been characterized by cautious optimism from suppliers, who have largely suspended quotations or maintained rigid pricing positions, while downstream buyers have adopted a wait-and-see approach. This standoff between buyers and sellers has resulted in limited spot market activity despite the price increases.

What's Happening in the Refined Cobalt Supply Chain?

Current Supply Dynamics

The refined cobalt segment is experiencing a complex supply situation marked by several key trends. Most refined cobalt smelters are prioritizing fulfillment of long-term contract obligations, leading to increasingly limited spot market availability.

Supply patterns observed include:

• Initial quotation suspensions as traders assessed market impact
• Gradual resumption of quotations with firm pricing positions
• Reluctance to negotiate prices downward despite limited transactions
• Expected supply tightness if DRC export restrictions persist beyond 60 days

Industry experts note that while immediate supply shortages aren't occurring, the psychological impact of potential future constraints is driving current price behavior more than actual physical shortages.

Demand Patterns and Transaction Activity

Despite price increases, transaction volumes remain constrained by several factors. Following the DRC policy announcement, there was an initial surge in inquiries from both traders and end-users. However, this interest has largely failed to translate into completed transactions.

Market analysts have observed:

• Only sporadic actual transactions despite increased inquiries
• Market sentiment cooling mid-week as Zhonglianjin futures stabilized into a fluctuating pattern
• Weakened inquiry willingness from end-users as price volatility increased
• Downstream producers maintaining just-in-time procurement strategies despite supply concerns

This disconnect between price movements and actual market activity suggests that psychological factors and future expectations are currently outweighing immediate physical market conditions.

Inventory Situation and Price Outlook

The current market is characterized by substantial inventory imbalances across the value chain. While some downstream segments report relatively low stockpiles, the midstream sector holds significant excess inventory that continues to buffer against immediate supply disruptions.

Key inventory dynamics include:

• High social inventory levels in the midstream sector acting as a price stabilizer
• No significant improvement in downstream demand fundamentals to absorb existing inventory
• Cautious purchasing behavior from end-users despite supply concerns
• Expectations that refined cobalt prices will revert to a fluctuating pattern in the coming week as market participants digest the initial shock of the DRC announcement

This inventory overhang explains why transaction volumes remain suppressed despite rising prices—buyers can afford to wait while relying on existing stockpiles.

How Are Cobalt Intermediate Products Performing?

Supply-Side Developments

The intermediate cobalt product segment has shown slightly different dynamics compared to refined cobalt. While prices have increased, the magnitude has been more modest than in refined markets. This discrepancy reflects the different inventory situations and production economics across the value chain.

Current market conditions include:

• Most mines and traders displaying bullish sentiment and suspending quotations
• The few suppliers providing quotes maintaining rigid pricing positions
• Growing expectations of potential raw material shortages in China due to DRC policy extension
• Import delays creating additional pressure on domestic Chinese supply

Intermediate products form a critical link in the cobalt value chain, serving as the primary input for refined cobalt production. Disruptions at this level can have amplified effects throughout downstream sectors if sustained.

Buyer-Seller Dynamics

The relationship between suppliers and buyers in this segment reveals significant market tensions. Smelters are caught in a difficult position—facing rising input costs while downstream demand remains weak.

Market participants report:

• Smelters facing operational challenges including financial losses from unfavorable price spreads
• Weak downstream demand creating hesitancy among buyers to accept higher prices
• Many smelters delaying purchases and relying on existing inventory
• Smelters with low inventory attempting inquiries but struggling to complete transactions
• Significant price gaps between buyer expectations and seller demands

This standoff has resulted in limited transaction activity despite increased price quotes, as neither side is willing to make substantial concessions in the current uncertain environment.

What's Happening with Cobalt Compounds and Derivatives?

Cobalt Sulphate Market Conditions

The cobalt sulphate segment has shown a reversal from previous downward trends, with prices rebounding following the DRC policy announcement. This compound is particularly critical for battery manufacturing, serving as a key input for ternary cathode precursors.

Current market conditions include:

• Prices halting their previous decline and rebounding following the DRC policy announcement
• Smelters and traders maintaining quotations near previous high levels
• Downstream ternary enterprises showing no significant order improvements
• Buyers preferring to digest existing inventory rather than make new purchases
• Refined cobalt purchases remaining suspended due to unfavorable economics

Despite the price increases, fundamental demand in the battery sector remains weak, limiting the upside potential for cobalt sulphate in the near term.

Cobalt Chloride Pricing and Availability

The cobalt chloride market is characterized by uncertainty and limited activity. This specialized compound, used in various industrial applications beyond batteries, has seen similar price trends but with even more pronounced hesitancy in terms of market activity.

According to SMM data:

• Current quotations range between ¥63,000-65,000 per metric ton from select producers
• Many salt plants have suspended quotations to observe market developments
• Smelters maintain cautious positioning with minimal market participation
• Downstream enterprises hold relatively ample inventory
• Active inquiries but cautious commitment from buyers

The disconnect between inquiry activity and completed transactions highlights the market's overall uncertainty and risk aversion.

Cobalt Oxide (Co₃O₄) Market Situation

The cobalt oxide segment shows the most pronounced wait-and-see approach among cobalt compounds. This critical input for lithium cobalt oxide (LCO) cathodes has seen the most dramatic market response to the DRC policy changes.

Market participants report:

• Producers suspending both quotations and shipments entirely
• No significant transactions occurring in the market
• LCO cathode plants holding relatively low inventory but choosing to wait
• Some Co₃O₄ plants indicating potential shipment expectations at ¥210,000-220,000 per metric ton
• Long-term price trends dependent on overall cobalt inventory sufficiency through December

The complete suspension of market activity in this segment represents the extreme end of market caution, with participants preferring to wait for clearer signals before committing to transactions.

How Are Downstream Products Responding to Cobalt Price Changes?

Cobalt Powder and Alloy Markets

The specialized cobalt product segments have shown varied responses to the broader market trends. These niche products, which serve specialized industrial applications beyond batteries, face unique supply chain dynamics.

Current market conditions include:

• Cobalt powder prices increasing approximately ¥10,000 week-over-week
• Price increases driven by prolonged delays in raw material imports
• Cobalt carbonate prices following the general upward trend
• Increased inquiries from downstream alloy enterprises
• Most alloy enterprises adopting a wait-and-see approach due to sentiment-driven price movements

The specialized nature of these markets means they can sometimes experience more pronounced supply constraints than mainstream cobalt products, as fewer substitutes exist and production capacity is more limited.

Ternary Cathode Precursor Market Dynamics

The precursor market shows modest price movements despite upstream volatility. As a critical intermediate product in the battery supply chain, precursors represent an important indicator of how raw material price changes are propagating through the value chain.

Key trends include:

• Slight price increases for 5-series, 6-series, and 8-series ternary cathode precursors
• Stabilization in nickel sulphate and manganese sulphate prices
• Cobalt sulphate rebounding due to the DRC export ban extension
• Limited upward price momentum due to weak ternary market demand
• Cathode material producers reluctant to accept higher discount coefficients

The modest price movements in this segment suggest that manufacturers are absorbing some of the input cost increases rather than passing them fully to customers, likely due to weak end-market demand.

Ternary Cathode Material Price Trends

The cathode material segment shows varied price responses across product types. These materials represent the final form of cobalt before integration into battery cells, making their pricing particularly important for understanding overall market dynamics.

Market data indicates:

• 5-series ternary cathode material prices rising slightly
• 6-series and 8-series prices remaining stable
• Raw material cost factors offsetting each other (rising cobalt vs. falling lithium)
• Mediocre performance in the domestic ternary NEV market
• Only select newly launched car models boosting mid-to-high-nickel ternary material orders
• Relatively strong performance in Southeast Asian and Indian e-bike and power tool markets

The varied price movements across different cathode formulations reflect their differing cobalt content and exposure to raw material price fluctuations.

What's the Outlook for the Cobalt Market?

Short-Term Price Projections

Based on current market conditions, several price trends are emerging for the coming weeks. These projections reflect the balance of supply concerns against weak demand fundamentals and high inventory levels.

Market analysts expect:

• Refined cobalt prices to revert to a fluctuating pattern after the initial spike
• Cobalt sulphate prices likely to stabilize temporarily at current levels
• Ternary material prices expected to fluctuate slightly amid weak demand
• LCO prices likely to rise significantly in the short term due to oxide supply concerns
• Precursor prices may rise slightly driven by cobalt sulphate increases

These divergent price trends across different market segments highlight the complex interrelationships within the cobalt value chain and the varying impact of the DRC policy on different product categories.

Supply Chain Implications

The extended DRC export restrictions will have several impacts on the global cobalt supply chain if maintained. While immediate shortages are unlikely due to existing inventory levels, prolonged restrictions could create more significant disruptions in Q3 and Q4 2025.

Potential impacts include:

• Raw material shortages for cobalt intermediate products in China beginning in August
• Upward pressure on prices throughout the value chain as inventory buffers deplete
• Production adjustments likely among precursor and cathode material manufacturers
• Potential acceleration of research into cobalt-reduced battery formulations
• Increased interest in recycled cobalt sources as supply constraints persist

The severity of these impacts will depend largely on the duration of the DRC export restrictions and whether alternatives can be developed in time to mitigate shortages.

Demand Outlook

The demand side of the equation shows mixed signals across different end-use sectors. While overall battery demand remains subdued, pockets of strength exist in certain market segments and geographies.

Current demand patterns include:

• Domestic Chinese ternary NEV market remaining sluggish
• Only leading battery cell manufacturers reporting order growth
• Consumer electronics market performing moderately with potential recovery in July
• Small power segment showing relative strength in international markets
• Cautious market sentiment about H2 and Q4 2025 demand

The geographic diversification of demand provides some stability to the overall market, with strength in international markets partially offsetting weakness in domestic Chinese consumption.

What Other Factors Are Influencing the Cobalt Market?

Production and Shipment Trends

Several production patterns are emerging across the cobalt value chain as manufacturers adjust to changing market conditions. These adjustments reflect both the supply concerns stemming from DRC policy and the persistent demand weakness in key end markets.

Current production trends include:

• Weak precursor shipments in June with notable production cuts at some plants
• Slight recovery in precursor production anticipated in July
• Flat production schedules for ternary materials with no significant increments
• Continued production adjustments based on inventory levels and demand signals
• Some producers delaying capacity expansion plans amid market uncertainty

These production adjustments will play a crucial role in determining whether the market remains oversupplied despite raw material constraints, or if balance begins to tighten in the coming months.

Inventory Management Strategies

Market participants are adopting varied inventory approaches in response to the current uncertain environment. These strategies reflect different risk assessments and financial capabilities across the value chain.

Current inventory approaches include:

• Midstream players maintaining high inventory levels as a buffer against supply disruptions
• Downstream producers implementing just-in-time procurement to minimize capital tied up in inventory
• Some LCO cathode plants reporting relatively low inventory but choosing to wait rather than buy at higher prices
• Ternary cathode material producers maintaining sufficient inventory to meet current demand levels
• Strategic stockpiling by some financially strong players anticipating future price increases

These diverse inventory strategies create additional complexity in predicting market movements, as different segments of the value chain face different degrees of urgency in replenishing stocks.

Global Market Context

The cobalt market is operating within a broader global context that includes both technological changes and evolving trade patterns. These macro factors will shape long-term demand trends beyond the immediate impact of the DRC export restrictions.

Key global trends include:

• China's auto exports expected to reach 7 million units in 2025, according to Sun Xiaohong of CCCME
• Potential growth to 10 million units by 2030 if export growth remains above 10%
• Emerging technologies like solid-state and semi-solid-state batteries influencing future demand
• Development of new battery formats including full-tab 21700, 4680, and 4695 large cylindrical batteries
• Far East Battery's focus on solid-state battery systems potentially altering future cobalt demand patterns

Yuan Tianli's confirmation that LFP chemistries are compatible with solid-state batteries represents a potential long-term threat to cobalt demand, as it could accelerate the shift toward cobalt-free battery chemistries.

FAQs About the Cobalt Market

What is causing the recent rise in cobalt prices?

The primary driver behind the recent increase in cobalt prices is the Democratic Republic of Congo's decision to extend its export ban on cobalt raw materials. As the DRC accounts for approximately 70% of global cobalt production, this policy change has created significant supply concerns throughout the global market.

The price impact has been amplified by market psychology, as traders and consumers anticipate potential future shortages even though current inventory levels remain adequate in most segments of the value chain.

Why aren't transaction volumes increasing despite rising prices?

Despite price increases, transaction volumes remain limited due to several factors:

• High inventory levels in the midstream sector reducing immediate purchasing urgency
• Weak downstream demand fundamentals in key end markets like EVs
• Cautious purchasing behavior from end-users who can rely on existing inventory
• Significant price gaps between buyer expectations and seller demands
• Just-in-time procurement strategies limiting speculative purchasing

This disconnect between prices and transaction volumes highlights the speculative nature of the current price increases, which are driven more by future expectations than immediate physical shortages.

How are different cobalt products responding to the market changes?

Different cobalt products are showing varied responses to the DRC policy extension:

• Refined cobalt: Significant price increases with limited spot transactions
• Intermediate products: Modest price increases with suppliers suspending quotations
• Cobalt sulphate: Price rebound after previous declines
• Cobalt chloride: Limited quotations with prices around ¥63,000-65,000 per metric ton
• Cobalt oxide: Complete suspension of quotations and shipments

These divergent responses reflect the different inventory situations, demand patterns, and substitution possibilities across various cobalt product categories.

What is the outlook for cobalt prices in the coming weeks?

The short-term outlook suggests refined cobalt prices will likely revert to a fluctuating pattern after the initial spike, while cobalt sulphate prices may stabilize temporarily. LCO prices could rise significantly due to oxide supply concerns.

The extent of price movements will depend on:

• Actual transaction outcomes in the spot market
• Inventory management strategies across the value chain
• Potential clarifications or modifications to the DRC export policy
• Demand signals from key end markets like EVs and consumer electronics
• Production adjustments by manufacturers in response to changing conditions

Market participants should monitor both physical transactions and futures market movements for signals about price direction.

How is the cobalt market affecting battery production?

The volatile cobalt market is creating challenges for battery producers, who are facing rising input costs amid weak en

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