Info from StockheadHigh Voltage: Congo’s cobalt cuts cause price...

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High Voltage: Congo’s cobalt cuts cause price spike as China scrambles for supply

DRC has banned cobalt exports for a four month period Chinese refineries are scrambling for supply causing a price spike Cobalt Blue analyst says DRC may be taking cues from Indonesia’s nickel export policies Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, and vanadium.Cobalt prices have been in the doldrums for a very long time, but recorded their first monthly gain in over a year in February after the Democratic Republic of the Congo ordered a four month export ban on the metal.Why does this matter? Well, last year the DRC produced around 220,000t of cobalt, primarily in the form of cobalt hydroxide, which amounts to a whopping 76% of global supply.LME cobalt has run 56% higher in only a month to US$33,560/t as a short squeeze hits. LME prices ran some 15% higher on Wednesday alone for the battery metal. Fastmarket cobalt hydroxide prices have surged 77% in the first two weeks of March alone to US$10.50/lb.Cobalt Blue Holdings (ASX:COB) analyst Joel Crane said the ban has resulted in cobalt refineries – mostly based in China – scrambling to secure feedstock “putting significant upward pressure on prices.”So much so, that Chinese state-controlled mining company MMG suspended operations at its new processing plant at its Kinsevere mine in the DRC shortly after its opening due to a price slump and the export ban.That slump was caused by a supply flood that’s now drawing the ire of the DRC Government. China Molybdenum, also known as CMOC, was the biggest culprit. It produced 114,165t last year – largely from the Tenke Fungurume mine where copper production is continuing to expand. That’s more than double its 2023 output of 55,526t and well above its 70,000t upper guidance limit.CMOC had floated plans to produce 100,000-120,000t of the metal in 2025, with DRC stepping in to stem the bleeding.“For the first time in recent history, a government policy has effectively frozen such a dominant share of a global commodity market,” Crane said.“The four-month export ban has sent shockwaves through the market. “After two years of oversupply and falling prices, many refiners had cut back on stockpiles.“With supply suddenly limited, the market is under intense strain to secure material.“Adding to the pressure is seasonality—post-Lunar New Year restocking typically drives demand, especially from the consumer electronics sector, which accounts for ~30% of cobalt use.”Cobalt pricing in recent years. Source: COB.The company’s Kwinana cobalt refinery, which is in the final stages of permitting and funding, will be Australia’s first cobalt refinery and one of the largest suppliers of battery-grade cobalt sulphate outside China.COB also has the Broken Hill project, which is one of the world’s largest non-African cobalt sources.The company is awaiting improved market pricing to progress it into production.“With global supply abruptly tightening, Australia’s stable and reliable jurisdiction becomes even more attractive,” Crane said.“Having spent years working closely with EV manufacturers and battery makers, we understand the supply chain.“While we couldn’t predict this exact disruption, we’ve always known the market would shift, making projects like ours a significant investment opportunity.”