Insights 
VT 
The Democratic Republic of Congo, the leading global producer of cobalt, has extended a temporary export ban on cobalt for an additional three months. The ban is now in effect until September 2025, following an initial four-month suspension that began in February. This decision was made after cobalt prices fell to a nine-year low of approximately $10 per pound.
The ban’s extension has impacted cobalt prices, leading to a 35% increase. The halt in exports, particularly affecting companies like Glencore, has prompted other regions, including Indonesia, to adjust to potential continued restrictions. These adjustments could alter market shares and affect global supply chains.
Market Supply Shift
The current situation reflects a major shift in market supply, primarily driven by policy decisions in the Democratic Republic of Congo. With the export ban on cobalt extended through to the third quarter of next year, we are witnessing marks of pressure in the pricing mechanism. What started as a reaction to a prolonged price depression—falling below the $10 per pound level—has now transformed into a supply-side response with direct influence on trading volumes and volatility curves.
Cobalt futures responded quickly; the 35% rise is not merely price recovery, but more a re-pricing of availability and forward risk. Restrictions in the physical market are often slow to reflect in derivatives, but this has not been the case here. Disruptions that persist for this length of time tend to shift assumptions in term structures, and we’re already seeing a recalibration in forward pricing, notably through the second half of 2025. These changes aren’t only about the spot rate—there’s now implied scarcity shaping how backwardation develops through shorter-dated contracts.
Participants will have already marked adjustments in correlation patterns, particularly between cobalt and related metals such as nickel and lithium. Movements in those spaces have been muted by comparison, indicating that this revaluation is highly localized in origin. There is scope, however, for broader material ramifications as substitution considerations spill into pricing models. The impact of tightened cobalt flows runs deeper into contract structuring, especially among those instruments that are used for synthetic exposure by industrial hedgers.
Glencore And Indonesia
Focusing on Glencore’s position, the halt in Congolese material has removed a notable chunk of market flow. This creates an imbalance that smaller producers could eventually begin to address, but not at speed. With processing centred in very few locations, particularly in China, any reduction in raw input creates delays which ripple back into settled price action. We cannot rely merely on stated production capacity—timing now takes priority over volume.
Shifts in Indonesia point to another layer of transition. There, we’ve seen mining interests posture towards increased output, likely positioning for mid-term supply security advantages. If this trend carries forward and material is exported under competitive contracts, then the arbitrage from region to region tightens, altering spreads in paper markets. For now, those movements remain relatively soft in correlation terms, but structurally they hint at buffer capacity that wasn’t the focus earlier in the year.
The tightness in available supply should prompt attention to margin requirements, particularly for short exposures. Short strategies premised on the earlier price lows now face risk not only from price but access cost—financing availability and delivery obligations are now more sensitive to re-pricing flows from off-take agreements.
We are adjusting our near-term volatility estimates upward, particularly around key inventory data releases and policy updates. Seasonality remains muted as a variable influence; policy and logistics dictate far more at this point.
