HUAYOU COBALT(SH:603799) Xin Hua Cai Jing·2025-10-16 10:38Core Viewpoint - The new cobalt export quota system in the Democratic Republic of Congo (DRC) is expected to tighten cobalt supply, but the impact on Huayou Cobalt's raw material and product supply stability is limited due to its diversified sources and ongoing projects [1][2]. Group 1: Cobalt Export Quota and Market Impact - The DRC's new export quota system allows for the export of 18,125 tons of cobalt in 2025 and a maximum of 96,600 tons annually in 2026 and 2027, which is based on the past three years' export volumes [1]. - Under the new quota, only about 44% of cobalt production can be exported, leading to a reduction of over 100,000 tons in available supply [2]. - Market estimates suggest a shift from a surplus of approximately 70,000 tons in 2024 to a shortage of about 30,000 tons [2]. Group 2: Huayou Cobalt's Production and Financial Performance - Huayou Cobalt's nickel-cobalt wet smelting projects in Indonesia have a combined annual capacity of 180,000 tons and are currently operating above capacity [1][2]. - The company has a cobalt refining capacity of approximately 40,000 tons per year, with expectations to increase this to over 30,000 tons annually by 2026 due to new projects [2]. - Following the announcement of the export quota, Huayou Cobalt's stock price has increased by over 20%, and the gross margin for cobalt products in the first half of 2025 is around 32%, up from 15.54% the previous year [3].