Cobalt prices have climbed sharply after the Democratic Republic of Congo (DRC), the world’s dominant supplier, extended its ban on cobalt concentrate exports, first imposed in February. The sudden extension is expected to remove over 100,000 tonnes of cobalt from the global supply chain over a seven-month period, triggering volatility in futures markets and renewed focus on global sourcing strategies. On Monday, cobalt futures on China’s Wuxi Stainless Steel Exchange surged more than 9%, reaching 254 yuan (approximately $35.34) per kilogram. That marks the highest level for cobalt contracts on the exchange since mid-March, according to Reuters. The ban’s continuation added new uncertainty to an already disrupted market that has been grappling with oversupply and inconsistent demand from the electric vehicle (EV) sector.

The Democratic Republic of Congo is responsible for more than 80% of global cobalt output, most of which is produced as a byproduct of copper mining. A previous surge in production in the DRC, paired with softening demand—particularly from the EV battery sector—had helped push cobalt prices to inflation-adjusted record lows earlier this year. In January, cobalt sulphate prices, which feed directly into China’s EV battery supply chain, dropped to an average of just $3,556 per tonne.

The impact of the ban, however, has been swift. Since February, cobalt sulphate prices rebounded by 80%, reaching an average of $6,394 per tonne by May. Despite the sharp rebound, prices remain far below the peak of $19,000 per tonne reached in 2022, when demand for battery metals surged alongside the global EV boom.

Major producers are now adjusting to the extended ban. CMOC Group (SHA: 603993), which operates the Tenke Fungurume and Kisanfu mines in the DRC, said the export suspension would not significantly impact its operations. CMOC is one of the largest producers of cobalt globally, with its Congolese assets accounting for a sizable share of the world’s supply. Meanwhile, Glencore (LON: GLEN), the world’s second-largest cobalt producer, declared force majeure on some cobalt deliveries shortly after the initial ban was implemented. The Swiss-based commodities giant had been planning to sell 6,000 tonnes of physical cobalt to investment firm Cobalt Holdings as part of a deal tied to a proposed London Stock Exchange listing.

That listing, however, was shelved earlier in June. Cobalt Holdings abandoned its IPO plans, which would have raised up to $230 million and marked the largest mining flotation on the LSE since 2022. The canceled offering underscored investor unease about cobalt’s uncertain market dynamics and the impact of government policies in key producing countries.

Outside of Africa, cobalt production is also expanding in Indonesia, where nickel shipments have been rising significantly. As cobalt is often a byproduct of nickel mining, Indonesia’s growing output is drawing attention. The DRC and Indonesia are reportedly exploring cooperation to manage cobalt supply, potentially through coordinated quotas or similar mechanisms, in an effort to stabilize the market.

The global cobalt supply chain remains under pressure as a result of these developments. With the EV market no longer providing the same level of robust demand seen in recent years—and with supply-side shocks persisting—analysts expect continued volatility. Aviation and aerospace, once dominant consumers of cobalt, have long been overtaken by the EV sector, but their demand has not been sufficient to offset the recent slowdown in battery manufacturing growth. While the DRC’s decision to extend the ban may be aimed at asserting greater control over its mineral exports, it adds fresh challenges for battery manufacturers and metal traders, many of whom rely on predictable supply flows to manage pricing and production schedules. With no clear resolution in sight, the global cobalt market is bracing for more turbulence in the months ahead.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.