--- title: "Founder Securities: Policies break the expectation of oversupply in the cobalt market, optimistic about cobalt metal price expectations" type: "News" locale: "en" url: "https://longbridge.com/en/news/245797336.md" description: "Fangzheng Securities released a research report stating that the Democratic Republic of the Congo's (DRC) suspension of cobalt exports for four months will break the market's oversupply expectations, with cobalt prices rising by 14.5% to 182,000 yuan/ton. It is expected that the demand for cobalt metal will return to steady growth, and it is recommended to pay attention to companies such as Huayou Cobalt and Tengyuan Cobalt. The DRC dominates global cobalt supply and has the ability to control supply" datetime: "2025-06-24T01:47:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/245797336.md) - [en](https://longbridge.com/en/news/245797336.md) - [zh-HK](https://longbridge.com/zh-HK/news/245797336.md) generator: "portal-rs" --- # Founder Securities: Policies break the expectation of oversupply in the cobalt market, optimistic about cobalt metal price expectations According to the Zhitong Finance APP, Founder Securities released a research report stating that the Democratic Republic of the Congo (DRC), as the world's main cobalt supplier (accounting for 75.9% of global production in 2024), has suspended cobalt exports for four months, which will significantly disrupt the market's oversupply expectations. Following the announcement of the policy, cobalt prices have risen by 14.5% to CNY 182,000 per ton. Based on optimistic expectations for cobalt metal prices, the firm recommends paying attention to Huayou Cobalt, Tengyuan Cobalt, Hanrui Cobalt, and Luoyang Molybdenum. **Event:** According to reports, relevant departments in the DRC announced on February 24 that the country has decided to suspend cobalt exports for four months to address the global oversupply situation in the cobalt market. This measure took effect on February 22. The statement indicated that an assessment would be conducted after three months, at which point the suspension measures may be adjusted or lifted based on the situation. ## Founder Securities' main viewpoints are as follows: **The DRC is the main supplier of cobalt globally** According to the USGS, the global cobalt metal reserves in 2024 are 11 million tons, of which the DRC has 6 million tons, accounting for 54.5%. In terms of production, the global cobalt output in 2024 is expected to be 290,000 tons, a year-on-year increase of 21.8%; among this, the DRC's cobalt output is 220,000 tons, accounting for 75.9%. In terms of incremental production, the global cobalt output is expected to increase by 52,000 tons in 2024, with the DRC contributing 45,000 tons, accounting for 86.5% of the increment. The firm believes that the DRC holds a controlling position in terms of cobalt resource reserves, resource production, and production increments. The DRC has the ability to control the pace of cobalt metal supply release. **High copper prices give the DRC government the ability to control cobalt production** As of February 27, the average LME copper price from 2025 to date is USD 9,227 per ton. The firm believes that under the current copper price, even if cobalt by-products cannot be exported, local copper companies in the DRC will still maintain copper mining and exports, providing tax revenue for the DRC government. **Cobalt prices are at historical low levels, and the DRC government has a strong willingness to stabilize prices** On February 24, the price of cobalt metal in China was CNY 159,000 per ton, which is at the lowest level since 2007. Following the announcement of the export ban by the DRC, as of February 27, cobalt metal prices rose by 14.5% to CNY 182,000 per ton. Considering that the DRC government stated it would assess the policy's effectiveness in three months, the firm believes that the DRC government has a strong willingness to stabilize and support prices. **The export ban is expected to reshape the cobalt metal oversupply pattern** The firm believes that the continuous decline in cobalt metal prices since 2022 is partly due to the declining market share of ternary cathode materials, especially the decrease in the share of low-nickel high-cobalt products, leading to demand growth falling short of expectations. On the other hand, due to high copper prices, the DRC's copper production has rapidly increased, resulting in a significant rise in by-product cobalt production. The firm believes that as the trend of declining ternary share weakens and the demand recovery in consumer electronics supported by national subsidies occurs, cobalt metal demand will return to stable growth. The export ban will significantly reduce the inflow of cobalt metal and break the market's expectation of continued oversupply. **Risk Warning:** The DRC government's cobalt export ban may be lifted earlier than expected. The by-product cobalt production from Indonesian nickel laterite wet processing may exceed expectations. 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