US President Donald Trump has imposed extra import tariffs on Chinese goods since taking office in January, as well as placing levies on key trading partner Canada, another key source of cobalt, used in aerospace, for the US.

Lygend's cobalt metal production in Indonesia pre-dates the latest tariffs, industry sources say, with cobalt produced by the group in the country first exported to the US last year by traders with US customers. 

But the traders shipping its cobalt are using Indonesia's tariff-free status to sell metal more cheaply to US customers facing levies on Chinese and Canadian supply, the sources said.

"US consumers can get cheaper cobalt from Lygend - the metal comes from Indonesia and not China," a cobalt industry source said. "Now there are tariffs on Canadian imports, more US buyers will look to Indonesia."

Lygend did not respond to requests for comment.

Chinese companies dominate cobalt production in Indonesia, where it is a byproduct of nickel.

Though still small, cobalt metal sales had more than doubled by January from first deliveries in November, rising to 121 from 58 metric tons, with a three-month total of 290 tons worth $9.6 million, data from information provider Trade Data Monitor (TDM) showed. 

Cobalt shipments to the US directly from China, the world's top producer, fell after US President Trump in his first term imposed a 10 percent levy on Chinese imports in 2018 and raised it to 25 percent in 2019. 

With the latest 10 percent hike, US importers would have to pay 35 percent tariffs on shipments of Chinese-origin cobalt, which is used in electric vehicle batteries and in defense equipment.

Darton Commodities, a specialist supplier of cobalt metal, estimates Indonesia's mined cobalt production totalled 30,920 tons or 11 percent of global supplies last year, compared with 18,900 tons or 8 percent respectively in 2023. 

Canadian cobalt metal exports last year at more than 1,700 tons amounted to 18 percent of the total shipped to the US, according to TDM, making it the fourth largest source of the metal for US consumers.

Mounting supplies from Indonesia and the Democratic Republic of Congo (DRC) have contributed to global oversupply of cobalt, which pushed prices down to nine-year lows around $10 a lb or $22,000 a metric ton in February. COB-CATH-LON, OCBc1

Prices have since recovered due to Congo's government suspending cobalt exports for four months to rein in oversupply.

However industry sources say this will make little difference to a market in which supplies are significantly greater than demand.

Top cobalt producing companies in Congo, where it is a byproduct of copper, include London-listed miner Glencore and China's CMOC Group.

Norway, Japan and Madagascar were the top three cobalt metal exporters to the US last year.