Understanding the Delay in DRC's Cobalt Exports: Regulatory Hurdles, Logistics Bottlenecks and Market Implications

The forecast for cobalt intermediate import volumes in 2026 is primarily based on three factors. Due to timing constraints, only about nine months' worth of the basic 2026 quota is expected to arrive in China. The entire quota in 2025 is anticipated to be received in China during 2026. Additionally, approximately 6,000 tonnes of cobalt intermediate inventory that had not been imported earlier is expected to arrive. Meanwhile, imports from other countries are estimated to range between 100-350 tonnes per month. Given that Chinese demand accounts for about 75%-80% of global demand, the total import volume of cobalt intermediates in 2026 is projected to be around 82,500 tonnes.

I. Market Performance Under Policy Disturbances

(1) Cobalt Price Trends

Driven by policy disruptions in the raw material sector, cobalt prices surged rapidly within the year. By mid-November 2025, the market price for cobalt intermediates had risen to $23.88 per pound, accumulating a increase of over 318%, effectively tripling in value.

In addition, the price gaps between standard-grade and alloy-grade cobalt, as well as the spread between high and low ranges of standard-grade cobalt, have narrowed due to tight global supply of cobalt raw materials. This reflects reduced disparity in market quotations.

(2) Costs & Profits

With cobalt intermediate prices remaining high, smelters were under significant production pressure. The cost of producing cobalt sulfate through the dissolution of refined cobalt was comparable to prices of some older inventory in the market. However, a considerable price gap still existed when compared to new inventory.

Monthly average spot profit margins for cobalt sulfate indicate that since early 2024, immediate profit margins for cobalt sulfate have gradually narrowed. This trend has become more pronounced during off-peak seasons.

However, two anomalous points emerged in 2025, with relatively optimistic spot profit margins observed in March and October. These primarily corresponded to the following events, on February 22, the Regulatory Authority for Strategic Mineral Markets in the Democratic Republic of Congo (DRC) announced a four-month suspension of cobalt product exports; and on September 21, the DRC announced the lifting of the cobalt export ban, implementing a quota-based export system starting October 15. Specific enterprise-level quota allocations were disclosed in December, with the total quota volume for 2026 reduced by over 50% compared to 2024, effectively locking in supply levels. In the short term, market sentiment has been stimulated, leading to aggressive quotations from downstream smelters. The rate of price increase outpaced the rise in raw material costs. However, due to the excessively rapid price surge, significant discrepancies emerged between buyers and sellers. After a period of concentrated procurement, market activity cooled, and cobalt sulfate prices stabilized temporarily. Meanwhile, cobalt intermediate prices continued to climb due to supply constraints, resulting in an inverted spot profit margin for cobalt salts.

II. Domestic Raw Material Import Structure

In recent years, with the gradual commissioning of Indonesian HPAL projects, cobalt is being produced as a by-product in the form of MHP. This has positioned Indonesia as the world's second-largest cobalt producer, while Indonesian cobalt supply remains insufficient to cover the global cobalt supply gap in the short term. However, its share in China's imports of primary raw materials has increased, currently accounting for approximately 30-40%. China's import volume is projected to grow by about 15%.

Customs data exhibits some lag. Based on the imports in October, which remained within the traditional peak season, decreased compared to September but were slightly higher than August levels. Analysis by trading partners indicates that most raw materials originated from shipments previously dispatched from the DRC, which were held at ports and bonded warehouses. Additionally, cobalt from Russian nickel sources provided some supplementary supply. According to registration data, cobalt intermediate smelting remains concentrated in Zhejiang province, both in terms of total volume and October imports.

III. Summary of Key Factors Affecting Raw Material Land Transportation

Viewpoint: As of now, the Democratic Republic of Congo (DRC) has not yet issued export licenses. Most industry participants speculate that quota allocations will be announced in December, with shipments loaded around January, arriving at Chinese ports approximately in March 2026.

There are two main land transport routes available for cobalt intermediates.

(1) Southern Route via Road Transport to Durban Port, South Africa:

The Durban route is the traditional transport corridor. Although slightly longer at approximately 3,300 km, it benefits from relatively better road conditions. The primary risk is congestion caused by concentrated shipments.

(2) Eastern Route via Road Transport to Dar es Salaam Port, Tanzania:

The Dar es Salaam route is shorter, spanning about 2,600 km. However, road conditions are comparatively poorer, with most roads within the DRC being unpaved. These routes become muddy and challenging during the rainy season, which has a more significant impact on the Dar es Salaam corridor.

Factor 1: Seasonal Rainfall Impact

The rainy season in the DRC lasts from November to May each year. Persistent heavy rainfall can trigger floods and landslides, potentially disrupting land transportation during this period.

Factor 2: Border Crossing Efficiency

Cross-border routes face varying customs clearance efficiencies at international borders, which may cause delays.

Factor 3: Regional Security Situation

Political instability or conflicts in certain areas can lead to route closures or severe delays. Recent conflicts in the eastern DRC have intensified the situation in North Kivu, South Kivu, and Ituri provinces. However, these conflict zones are far from the mining-rich Lualaba Province, and neither of the two main transport routes passes through the eastern conflict areas. Therefore, current regional conflicts have minimal impact on cobalt intermediate transportation.

Factor 4: Port Congestion Risks

Both Durban and Dar es Salaam ports may experience congestion due to concentrated shipments, significantly extending waiting times before loading.

Edited by Cassie Li, lixiangying@mysteel.com