Glencore Declares Force Majeure on Cobalt Shipments

By Yusuf Khan

Diversified mining company Glencore PLC declared force majeure on its shipments of cobalt hydroxide with heavy flooding in Durban halting exports from the South African port.

Glencore, which is the world's largest producer of cobalt hydroxide--the chemical which is then processed to be used in batteries and other metallurgical goods--suspended its cobalt operations on Tuesday with flooding in the KwaZulu Natal province affecting logistics, according to those with knowledge of the matter.

Durban acts as Glencore's main port for exports of cobalt hydroxide, with the company's mining activity taking place in the Democratic Republic of the Congo. The company produced 31,300 tons of cobalt in 2021, and was forecasting output of roughly 48,000 tons in 2022.

Glencore declined to comment to Dow Jones Newswires on the matter.

Traders of the metal in Europe said prices had not yet reacted to the news with prices already having pushed to very high levels following the Ukrainian conflict. "It's creating tightness in an already tight market but not affecting the metal directly," a cobalt trader told Dow Jones Newswires in a call.

A different trader indicated that delays of more than two months between Durban and China have already been seen, meaning the current flooding issues are likely to add further strain, with shipments not expected until at least "July and August."

Prices over the last month have been fairly flat, according to price reporting agency Fastmarkets. In the firm's most recent price assessment on April 14 prices stood at an average of $33.69 a pound when being delivered to China including freight costs, while the month to date average stood at $33.60 a pound.

Downstream demand of cobalt has been under pressure in recent weeks with China's lockdowns affecting consumption of goods like electric vehicles. Traders have been speculating whether demand will bounce back in the region immediately following the lockdowns or if economic pessimism on inflation worries will dampen consumer spending.

Write to Yusuf Khan at yusuf.khan@wsj.com

(END) Dow Jones Newswires

April 20, 2022 13:35 ET (17:35 GMT)

Glencore (PK) (USOTC:GLNCY)
Historical Stock Chart
From Mar 2024 to Apr 2024