(Yicai) Feb. 26 -- China’s CMOC Group, the world's top cobalt producer, has called for a stable and healthy market environment for the metal after the Democratic Republic of the Congo suspended exports for at least four months to deal with a global supply glut that has pushed prices lower.

A stable and sustainable cobalt market is in the interests of all stakeholders and supports long-term industry growth, the Luoyang-based company told Yicai. The temporary export ban is not expected to greatly impact CMOC's operating performance, the firm said, adding that production at its Tenke Fungurume and Kisanfu mines in the Central African country is running smoothly.

Congo, the world’s largest cobalt exporting country, halted exports of the metal on Feb. 24. That same day, China’s spot electrolytic cobalt prices rose 2.5 percent to CNY166,500 (USD22,972) per ton, after going as high as CNY180,000. Shares of producers Hanrui Cobalt and peers initially climbed, but retreated today.

Cobalt, often produced as a byproduct of copper and nickel mining, has limited output volumes and lacks mainstream futures contracts, leading to high price volatility, a source in the mining sector pointed out. This disproportionately affects the performance of listed producers, so investors are advised to be cautious, the person added.

CMOC said that it has set up a dedicated task force to stay in touch with the Congolese government and industry authorities, closely monitoring policy developments.

Cobalt is a key material used across high-tech products such as electric vehicle batteries, chips, wind turbines, and jet engines. Supply has surged in recent years due to new copper-cobalt projects in the Congo and nickel-cobalt ventures in Indonesia. Global output reached 290,000 tons last year, with the Congo contributing more than three quarters, according to data from the United States Geological Survey.

Similar to lithium and other metals used in batteries, the market for cobalt has been in a downward spiral for years. Cobalt prices recently fell below USD10 per pound, the lowest since 2015, based on data from Fastmarkets. Chinese prices hover near CNY160,000 per ton.

CMOC's stock price [SHA: 603993] closed 1.2 percent higher at CNY6.85 (US1) a share in Shanghai today, representing a 4 percent increase since the beginning of the year.

Editor: Emmi Laine