U.S. companies are increasingly sourcing cobalt from China’s Lygend Resources (2245.HK) through its Indonesian operations to avoid steep tariffs imposed by the Trump administration on Chinese and Canadian imports. Lygend, which began exporting Indonesian-produced cobalt to the U.S. last year, leverages Indonesia’s tariff-free status to offer cheaper supplies amid a 35% levy on Chinese cobalt and 10% duties on Canadian metal.
Key Data Points:
Indonesian Shipments: U.S. imports of Lygend’s cobalt surged to 290 metric tons ($9.6 million) between November and January, doubling monthly volumes.
Market Impact: Indonesia’s cobalt output hit 30,920 tons (11% of global supply) in 2024, up from 18,900 tons in 2023, exacerbating a global oversupply that drove prices to 9-year lows ($10/lb) in February.
Tariff Pressures: Trump’s tariffs on Chinese cobalt (35%) and Canadian imports (10%) have redirected U.S. buyers to Indonesian supplies, which now compete with top exporters Norway, Japan, and Madagascar.
Strategic Shifts:
Chinese Dominance: Lygend’s Indonesian cobalt production (a nickel byproduct) underscores China’s growing control over critical mineral supply chains.
Price Volatility: Prices briefly rebounded after Congo halted exports for four months, but oversupply persists, with Glencore (GLEN.L) and CMOC (603993.SS) dominating Congolese output.
Industry Response:
“U.S. buyers are pivoting to Indonesia to dodge tariffs,” said a cobalt trader. “Lygend’s model exploits tariff loopholes, undercutting Canadian and Chinese suppliers.”