Core Viewpoint - The end of the cobalt export ban in the Democratic Republic of Congo (DRC) on October 15, 2023, and the introduction of a quota system will significantly impact the global cobalt supply-demand balance, with expectations of tight supply in the coming years [1][2]. Cobalt Export Ban and Quota System - The DRC, the world's largest cobalt producer, will replace the export ban with a quota system starting October 16, 2023, allowing for over 18,000 tons of cobalt exports by the end of the year [2][8]. - In 2024, the DRC is projected to have cobalt reserves of 6 million tons, accounting for 55% of global reserves, and is expected to produce 220,000 tons, representing 76% of global output [2]. Market Reactions and Price Trends - Following the announcement, cobalt-related stocks in China's A-share market rose, indicating positive market sentiment despite anticipated supply constraints [1]. - The current market shows a price increase for cobalt products, with electrolytic cobalt prices rising by 1% to 1,750 yuan/ton [3]. Supply Chain Dynamics - The DRC's export ban led to a significant reduction in cobalt availability, with industry insiders noting that if the ban had continued, market inventories would have been insufficient for normal operations [7]. - Major mining companies, such as Luoyang Molybdenum, reported a 13% increase in cobalt production but a 35.09% increase in inventory, indicating a mismatch between production and market demand [7]. Future Supply Challenges - The new quota system is expected to be insufficient to meet the growing demand, with estimates suggesting that China alone requires around 100,000 tons of cobalt annually [9]. - The DRC's planned export quotas for 2026 and 2027 are set at 96,600 tons per year, which may not align with the projected consumption needs [9]. Diversification of Supply Sources - Chinese companies are actively seeking alternative cobalt supply channels, including projects in Indonesia, which have shown significant production increases [10]. - The recycling of cobalt from used batteries is becoming increasingly important, with companies like Grinm Metal achieving over 10,000 tons of cobalt recovery in the previous year [10][11].