Cobalt hydroxide, a key component in EV batteries, has seen its price rise due to export restrictions from Congo

Sources in the industry said that prices of cobalt hydrxide, which is used to make chemicals for electric vehicles batteries, have increased sharply this past year due to cobalt export limitations from the top producer Democratic Republic of Congo. Congo suspended cobalt exports from February to October. The goal was to increase state revenue and tighten up oversight. The country has introduced new conditions to exporters that could complicate the recently-introduced system of quotas. This, according to sources, is likely going to worsen shortages and increase cobalt prices.

Analysts at Macquarie stated that the introduction of Congo's export quotas has caused an artificial tightening of the market, which removed between 160,000 and 170,000 tons this year.

Cobalt hydroxide is produced by Congo, and as a secondary product of nickel and copper mining in Indonesia. These are the two main global producers. These products are sold as a percentage of cobalt metal prices and are known as payables.

Since February, when Congo suspended exports, sellers of cobalt hydroxyl have raised their prices. The price of Congo's cobalt hydroxide has risen to 100% of its current value, which is around $24 per lb. This amounts to $52,900 per ton.

Sources said that there was a?progress in getting exports moving? but the large amounts required by China's battery manufacturers for electric vehicles would not arrive until February or March of next year.

Two sources in the industry said that some companies with?cobalt hydrxide for sale were charging a premium over the price of cobalt metal.

Payables for hydroxide made in Indonesia have risen from 50% to 90% since the beginning of the year.

Three sources in the industry, who requested anonymity because they were not authorized to speak with media, stated that demand for cobalt hydroxide has slowed down this month, and high payments are preventing buyers from purchasing.

(source: Reuters)