Cobalt stocks drop at Wuxi exchange in scramble for electric vehicle battery material

By Pratima Desai

LONDON, Feb 20 (Reuters) - Cobalt stocks on China's Wuxi exchange plummeted in late January, with traders attributing the drop to shortages in the world's top consumer of the electric vehicle battery material.

More than 3,250 LNZ-ELCOINVWX tons of cobalt metal, or 37% of stocks, were pulled from the exchange on January 29.

Supplies started to tighten last year after the Democratic Republic of Congo suspended cobalt exports in February 2025 after prices dropped to nine-year lows around $10 a pound or $22,000 a ton due to surpluses.

Most of Congo's cobalt is shipped to China.

Congo's cobalt is a byproduct of copper production and comes in the form of hydroxide used to make cobalt sulphate used in making lithium-ion batteries. Production of the mineral in the Central African country is expected to amount to 70% of global mine supply, estimated at more than 280,000 metric tons this year.

The suspension remained in place until Congo introduced export quotas on October 16 last year, when a system allocating 18,125 tons for the fourth quarter and capping annual exports at 96,600 tons from 2026 was launched.

This cap on exports, combined with prolonged preparations to implement the new quota system, has created shortages.

Since Congo banned exports, cobalt metal prices have increased 160% to $26 a lb COB-CATH-LON, OCBc1.

Cobalt hydroxide is priced as a percentage of the cobalt metal price

- known as payables. Traders say payables are now regularly quoted at record highs of 100%, a situation never seen before. Cobalt hydroxide payables were at 55% in January 2025.

Adding to worries about cobalt supplies globally is suspended operations at Madagascan miner Ambatovy due to damage at its facilities caused by a cyclone last week.

Ambatovy, owned by Sumitomo and state-owned Korea Mine Rehabilitation and Mineral Resources Corporation (KOMIR), produced around 28,000 tons of nickel in 2024 and roughly 2,500 tons of cobalt.

This week, Canada-based Sherritt S.TO said in a release it had reduced operations at its joint venture in Moa, Cuba, due to fuel supply constraints affecting the country.

"Currently, there is no immediate impact on operations in Fort Saskatchewan, Alberta (Canada)," Sherritt said.

"The refinery is continuing to produce finished nickel and cobalt for sale. The inventory of feed it has available for such production is expected to last until approximately mid-April."