SHARES of Chinese cobalt producers surged on Tuesday following a shock four month export ban on export of the metal by the Democratic Republic of Congo.
Shares in Nanjing Hanrui Cobalt Co. jumped as much as 17% in Shenzhen, while Zhejiang Huayou Cobalt Co. rose as much as 7.8%. Meanwhile, CMOC Group, which has been ramping up its two giant mines in Congo, slipped 2% in Hong Kong, said Bloomberg News.
Congo produces about three-quarters of the world supply of cobalt which has soared in recent years. CMOC Group ramped up output at two large mines in the country causing supply to outpace demand and prices to tumble, said Bloomberg News.
“Exports must be aligned with world demand,” Patrick Luabeya, president of the Authority for the Regulation and Control of Strategic Mineral Substances’ Markets, known as ARECOMS, told Bloomberg.
“Everybody is panicking and we don’t know how to secure the material,” Ian Liu, cobalt procurement director at CNGR Advanced Material Co., a Chinese battery-component manufacturer said at a Fastmarkets conference in Shanghai on Tuesday.
“We need a long-term mechanism to support cobalt prices, not a sudden halt on exports, which will cause chaos downstream,” he said.
Cobalt is used in the manufacture of electric vehicle batteries. However demand for cobalt has also been under pressure due to a slowdown in the electric vehicle market and sluggish sales of consumer electronics.
It was reported earlier this month that Glencore had cut its production target for cobalt this year in response to weak market conditions.
The company will produce between 35,000 to 40,000 tons of the battery metal this year, down as much as 42% from a production target set in December 2022, it said.
