Glencore, the world's biggest producer of cobalt, is unable to honour contractual deliveries of cobalt hydroxide from the Democratic Republic of Congo following heavy flooding in South Africa which hit goods stored at warehouse and affected logistics.
The downpour, which began on April 8, has caused extensive damage across the KwaZulu-Natal region, including the city of Durban, which contains the primary port for cobalt hydroxide exports that are trucked from the DRC.
“It’s Durban related, nothing to do with production, the force majeure,” a source familiar with the situation said.
Moving product to ports and onto vessels was a "disaster" and there was damage to inventories in "one warehouse", the source said.
“Everybody is in assessment mode,” a second supplier said.
Prices of cobalt hydroxide, meanwhile, are at record levels.
Platts assessed 30% Co cobalt hydroxide at $34/lb CIF China April 19 for spot cargoes in keeping with the Platts methodology, loading 15-60 days forward, Platts, part of S&P Global Commodity Insights, reported.
This price has been flat since March 29, but remained up from $10/lb on May 6, 2021, the start of the S&P Global assessment.
Glencore's cobalt production hit 31,300 mt in 2021, up 14% year on year after the limited restart at Mutanda in the DRC.
