Cobalt tightens: DRC quotas bite, black mass payables climb, sulfate sets the tone
Cobalt’s balance flipped tight. DRC export quotas and delayed approvals have starved Chinese refineries of hydroxide, pushing October cobalt prices sharply higher and lifting NCM/NCA black mass payables across regions. Chinese cobalt metal imports doubled in September as refiners sought workarounds; some is being dissolved into sulfate, albeit slowly. With no new Indonesian MHP capacity online yet, sulfate pricing is setting the marginal cathode cost—and recycled feedstock competition is intensifying.
Mechanics of tightness.
After the DRC introduced export quotas, cobalt standard grade Rotterdam jumped ~26% in October to ~$23/lb, while cobalt sulfate ex-works China surged ~31% MoM. Deficits expected in 2026–2027.
On-the-ground, export approvals lagged the October 16 “allowance,” delaying actual shipments and keeping China’s raw material pipeline thin through Q1 2026.
Behavioral shifts in China.
Chinese cobalt metal imports doubled in September (861 t vs 431 t in August) as refiners sought alternative inputs; some metal is being dissolved into sulfate, but conversion lines designed for small briquettes slow the process.
Recycling signal: payables up.
Competition for feedstock is pushing black mass payables higher across markets. In October, NCM/NCA black mass cif South Korea saw nickel/cobalt payables around ~80%, while DDP China inferred price reached ~$7,755/t, up ~33% since April launch—tracking the sulfate rally. China’s August rule change enabling limited black powder imports; volumes (≈306 t identified) remain small, so domestic scrap scarcity persists.
Spot tone.
A seller-dominated hydroxide market with few firm offers; actual trades remain slow, but the lack of supply cap is supporting intermediate prices.
Investment takeaway.
With Indonesian MHP expansions slipping to 2026, sulfate remains the price-setting unit for NCM cathodes. Any acceleration in DRC approvals eases the squeeze, but quota ceilings keep the medium-term bias tight.
Outlook: Bullish. High-cost buyers are likely to chase limited units as Chinese refiners bridge with metal dissolution and recycled feed. Watch DRC approval cadence and China’s downstream restocking windows.