The surprise DRC cobalt export ban aims to boost prices, but with market uncertainty looming, questions arise about enforcement, stockpiles, and the rising influence of Indonesia. Will the ban last? And how will it affect global cobalt market dynamics?
DRC takes action to support historically low cobalt prices
On 21 February 2025, the Democratic Republic of the Congo (DRC) announced a ban on all cobalt exports to be enforced the following day, shocking several major producers. According to the announcement from its ARECOMS authority, the ban will be implemented for at least four months, with a review scheduled in three months’ time.
Today, the DRC maintains significant influence over cobalt market dynamics, still accounting for three-quarters of the world’s intermediate supply. These measures have been implemented to support prices and possibly promote ore-refinery integration, similar to what has been achieved by the Indonesian nickel industry – a growing cobalt market player. Prior to the announcement, EU cobalt metal prices were languishing at ~$10 /lb, 100-year real-terms lows, amid oversupply, overcapacity and weak demand.
Such a move is by no means unprecedented in the cobalt market. Notable examples include CMOC’s nine-month copper-cobalt export ban from mid-2022, as well as various cobalt concentrate export bans first announced in 2013. While the recent CMOC export ban had little effect on global cobalt prices, the 2013 cobalt concentrate export ban brought price volatility both before and after the ban was implemented.
Since the announcement, CRU-assessed Chinese metal spot prices have spiked 8%, while prices for the Wuxi Exchange’s most-active futures contract, March 2025, surged by 15% overnight on February 25. CRU understands that traders and refiners increased their offers on the spot market immediately afterwards. However, most refiners have now withdrawn their offers, anticipating a surge in prices due to the export ban.
At the same time, most downstream buyers have been reluctant to purchase or stockpile, citing high stock levels and weak seasonal demand as reasons prices will not spike significantly. As a result, despite a rise in spot prices, transaction volumes have dropped to minimal levels. Interestingly, stock prices of Chinese cobalt market participants have seen mixed impacts. While CMOC – which supplied over 40% of the world’s cobalt intermediates in 2024 – saw a decline in their share price, smaller companies like Zhejiang Huayou Cobalt and Hanrui Cobalt saw their stock prices rise, indicative of speculative plays in the equity market.
Short-term impacts: The next four months
While global cobalt prices are expected to rise speculatively in the coming weeks, its magnitude remains uncertain. During the 2013 cobalt concentrate export ban, prices spiked 30% before the ban was implemented. CRU predicts a more subdued price rise this time. In 2013, exemptions were granted to several major producers, and conflicting reports are now emerging about whether trucks carrying hydroxide are being allowed to leave the DRC. This has raised questions among market participants about how strictly the export ban will be enforced this time. Undoubtedly, there will be pressure to lift the ban not only from producers, but also from the Congolese provinces of Lualaba and Haut-Katanga, which rely heavily on tax revenues from copper and cobalt sales.
According to the initial announcement, cobalt exports will be prohibited, but there will be no restrictions on cobalt production or copper exports. Some operations with high Co:Cu ratios may be forced to shut down entirely, while other small- to medium-sized players may have to temporarily or permanently halt cobalt hydroxide production, leading to cobalt being sent to tailings while copper production continues.
Major producers such as CMOC or Glencore are even less likely to curtail cobalt production. In all likelihood, many producers will continue producing cobalt, assuming the ban will last only four months. This could create storage challenges for those accumulating several months’ worth of hydroxide production on-site. Regardless, any curtailments are unlikely to amount to more than 20 kt/y Co capacity, much lower than the forecasted global intermediate surplus of ~50 kt Co for this year - according to CRU’s Cobalt Service (request a demo here). For copper, supply will largely be unaffected.
Given that major industrial operations now account for the overwhelming majority of DRC supply, CRU expects only limited volumes to be exported illegally, raising a key question about what quantity of cobalt intermediates are available outside the DRC. Using trade data and estimates of intermediate consumption during Chinese refined production, CRU estimates World ex. DRC intermediate stocks to be between 80 kt and 110 kt of Co, in addition to inventories of cobalt sulphate, metal and precursors. Assuming a steady rate of refined production, this would represent five to seven months’ worth of consumption, leading to a tighter market towards the end of a four-month ban.
While prices of cobalt hydroxide are expected to rise most sharply as the market tightens, predicting price movements for cobalt sulphate, standard-grade metal and alloy-grade metal is more complex due to the interplay of feedstock types and dominant supply sources. Compared to the metal market where many refiners rely on third party feedstock, the China sulphate market is more vertically integrated. The largest consumer of cobalt in the battery sector, CATL, is the second largest shareholder of CMOC and offtakes nearly all hydroxide from KFM – the world’s largest Co mine.
Given high Chinese inventory levels and the fact that floating volumes will reach China in less than two months, we expect the stimulus on sulphate procurement demand and prices to be more limited. For cobalt metal, CRU predicts that Chinese prices will not exceed RMB250,000 /t ($15.60 /lb equiv.) in the next four months.
Four months later: Extensions, quotas and fundamentals
A range of possibilities exists regarding when and how the DRC cobalt export ban will be lifted. In terms of when, DRC officials will be hoping that these measures will produce a rapid, sustained boost to pricing, allowing all restrictions to be lifted after four months. Given that ex. DRC intermediate inventories are likely sufficient to satisfy four months of consumption, there remains a strong possibility that the ban could be extended – particularly if prices do not recover to desired levels. CRU estimates that a four-month extension would drawdown all ex. DRC inventories, sending prices soaring.
In terms of how, a repeat of the lifting of CMOC’s nine-month export ban, after which copper and cobalt stocks were rapidly drawn down, would cause prices to crash again. The DRC government is reportedly considering export quotas, possibly through a mechanism like Indonesia’s RKAB nickel system, which would be a more viable solution. A quota system would allow export volumes to be gradually increased in line with end-use demand, in order to sustain a desired price level.
Such measures could lay the foundation for broader reforms in the Congolese cobalt industry, aiming to increase in-country value addition and improve transparency and regulation of the artisanal and small-scale mining (ASM) sector. How effectively any wider reforms could be implemented remains debatable, given the DRC’s ongoing struggles to regulate the ASM sector and the fact that Indonesia’s RKAB system has yet to provide the desired level of price support.
While wider reforms might be necessary, the episode brings to the fore the DRC’s already shaky ESG reputation and may have the undesired effect of both boosting the market’s emerging player – Indonesia – and accelerating the ongoing trend of cobalt thrifting in batteries.
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