Due to the export restrictions implemented by the Democratic Republic of the Congo, the global shortage of cobalt is expected to persist until 2030.

According to the commodity trading company Dalton Commodities, due to the export restrictions imposed by the main producer, the Democratic Republic of the Congo, on the supply chain, the global shortage of cobalt is expected to persist until the end of the 2030s.

The export volume of cobalt used in battery manufacturing has decreased since the Congolese government banned exports in February last year and then imposed strict quotas starting from October. Congo (DRC) typically supplies over 70% of this metal globally. The government's measures are aimed at reducing supply过剩 and boosting prices.

According to the data, since the implementation of the restrictions, the price of cobalt, which is also used in the aerospace and defense sectors, has soared by more than 160%. The main product exported by Congo, hydroxide cobalt, has increased by more than three times. Dutton Company pointed out in a report that this situation led to a shortage of over 82,000 tons last year.

The report states that export restrictions have plunged the cobalt market into a severe technical shortage. Although this gap was temporarily alleviated by the accumulated excess inventory before the embargo, these reserves are now structurally depleted.

Dutton Company stated: The downstream market is experiencing increasing price pressure, and the impact of raw material shortages is intensifying along the cobalt supply chain. The trader added that the revised market outlook indicates that Congo may choose to relax export quotas this year to mitigate the risk of a demand collapse, while maximizing revenue in the face of high prices and limited supply.

Although the export ban has been replaced by a quota system, due to delays in the implementation of the new procedure, exports did not resume until recently. According to Darton Company, the first batch of raw materials is expected to arrive in China around May or June, and the import volume of mixed nickel hydroxide cobalt (a nickel product containing cobalt) from Indonesia is expected to increase.

However, Darton Company also pointed out the increasing risks associated with producing this so-called MHP product in Indonesia, despite its growth potential, including potential disruptions in sulfur supply in this Southeast Asian country, availability of ore, and environmental issues.

The report states: The ripple effects resulting from Congo (DRC)'s implementation of export restrictions have highlighted the vulnerability of the cobalt supply chain, prompting all parties to increase investment in product diversification and material substitution. These developments may eventually curb the growth of demand in certain consumer markets.

—Extracted from today's Congo