Tight export controls out of the Democratic Republic of Congo (DRC) added tailwinds to cobalt costs in Q3, prompting market watchers to anticipate a shift from oversupply to steadiness within the coming months.
After beginning the yr at lows unseen since 2016 (US$21,502 per metric ton), cobalt started to rebound in Q2.
Costs for the metallic then flatlined within the US$33,300 to US$37,000 vary from the top of March by way of September, however a pointy rally in late October despatched values to US$47,110, a degree final reached in January 2023.
Cobalt worth, October 25, 2024, to October 23, 2025.
Chart through Buying and selling Economics.
A lot of the cobalt story this yr has been dominated by the February export suspension out of the DRC, which provides roughly three-quarters of the world’s cobalt. The preliminary curtailment was anticipated to final 4 months in an effort to rein in oversupply and stem a worth plunge beneath US$10 per pound, the bottom level in over 20 years.
The availability glut has been attributed to a surge in output pushed largely by China’s CMOC Group (OTC Pink:CMCLF, SHA:603993), which has quickly expanded manufacturing at two main DRC mines.
Cobalt provide anticipated to swing from surplus to steadiness
Cobalt provide has surged over the previous 5 years, with international mine manufacturing greater than doubling from 140,000 metric tons in 2020 to 290,000 metric tons in 2024. The majority of this development has come out of DRC, with annual output rising from 175,000 metric tons in 2023 to 220,000 metric tons in 2024. This speedy development has far outpaced demand from the electrical car (EV) sector and different end-use industries, leading to vital market oversupply.
In June, the DRC prolonged its export halt by way of September, a transfer that supported increased worth ranges.
“Commerce statistics for cobalt hydroxide imports into China in June confirmed the primary drop in materials following the export ban enforcement in late February,” wrote Fastmarkets’ Rob Searle in a June market replace.
“With a typical lead time of round three months, we anticipated June to be the primary month of decrease volumes. Cobalt hydroxide imports fell 62 p.c in June and are anticipated to stay at low ranges by way of to the top of December or early 2026. Ought to the export ban finish as deliberate on September 22, the top of the yr is the earliest we will count on to see new feed into the Chinese language market from the DRC,” the battery metals knowledgeable continued.
Because the deadline for the export halt extension drew close to, costs started to climb amid rumors that officers in Kinshashe would implement quotas to proceed curbing the market saturation.
After eight months of restricted commerce, the Authority for the Regulation and Management of Strategic Mineral Substances’ Markets (ARECOMS), introduced it was enacting a quota system aimed toward stabilizing international provide and costs.
The output cap will allow the export of 18,125 metric tons of DRC cobalt for the rest of 2025.
“In 2026, the annual quota is about at 96,600t, of which 87,000t will likely be distributed to producers on a professional rata foundation, with 9,600t retained underneath ARECOMS’ discretionary management,” a September Benchmark Mineral Intelligence report notes. “The framework will run by way of 2027, with changes attainable if officers deem the market ‘imbalanced.'”
The restrictions lifted cobalt costs to a 32 month excessive of US$48,570 on October 23.
Robust cobalt demand projected for subsequent two years
Though the cobalt market stays oversupplied, demand has steadily elevated alongside ballooning output, reaching report ranges of greater than 200,000 metric tons in 2024.
“The first development driver of this (development) is the electrical car market, mixed with portables, which is the second greatest battery market,” defined Benchmark’s William Talbot throughout a July Cobalt Institute webinar.
The alloy and navy functions phase additionally skilled development.
Talbot went on to notice that regardless of experiences that EV demand is waning in some areas, broad demand stays sturdy, and EVs that make the most of cobalt battery chemistries “are nonetheless rising at tempo.”
“If we have a look at the EV image year-to-date in 2025, we have had greater than 30 p.c development in comparison with the identical interval final yr in unit phrases,” he defined.
Cobalt worth development to proceed into 2026
The cobalt market is coming into a part of continued volatility and structural change, formed by shifting provide sources, evolving coverage frameworks and rising geopolitical rigidity, as per Benchmark’s Talbot and the Cobalt Institute.
Wanting forward, Benchmark expects Indonesia to overhaul the DRC as the important thing supply of latest provide by the late 2020s, as tasks resembling Kalimantan Ferro Nickel ramp up and few new developments emerge within the DRC.
On the demand aspect, Talbot mentioned the outlook stays “pretty sturdy,” with EV development driving consumption, regardless of some coverage headwinds within the US. He pointed to China’s deliberate ban on lithium iron phosphate (LFP) battery expertise, which he mentioned “is supportive of cobalt-containing chemistries” resembling nickel cobalt manganese (NCM).
Rising geopolitical tensions are additionally reshaping the cobalt provide chain.
“Main gamers are more and more cognizant of the place their supplies come from,” Talbot mentioned, citing new US and European funding in strategic and ESG-compliant cobalt tasks.
Talbot added that the cobalt worth chain has made “leaps and bounds” in sustainability, with roughly 80 p.c of refined cobalt now assessed underneath the Accountable Minerals Initiative — a key issue for automakers and authentic tools producers underneath tightening compliance necessities.
Whereas Benchmark stays cautious with projections, analysts at Challenge Blue say cobalt costs may rebound sharply in 2026 and 2027 because the DRC enforces its new export cap of 96,600 metric tons per yr.
“Such constraints may elevate cobalt costs towards historic actual ranges of over US$20 per pound,” reads a Challenge Blue report, noting that the quota “got here in decrease than many anticipated,” however aligns with its name for a rebalanced market.
In accordance with Challenge Blue, not less than 100,000 metric tons of exports could be wanted subsequent yr to keep up equilibrium. Accounting for delivery delays and processing losses, solely 85,000 to 90,000 metric tons are anticipated to succeed in finish customers — making a structural deficit that ought to proceed to assist costs. The quota framework may additionally spur home refining as export restrictions make long-term storage of cobalt hydroxide pricey.
Trade observers warn that producers — particularly copper-cobalt miners resembling CMOC — could have to undertake monetary hedging and alter manufacturing plans to navigate the added forms and potential export delays.
Equally, Fastmarkets expects the DRC’s new guidelines to assist cobalt costs, which have already soared greater than 240 p.c since February, Alexander Cook dinner wrote in an LME Week recap. Fastmarkets assessed cobalt hydroxide costs at US$19.50 to US$20.20 on October 14, up from simply US$5.65 in February.
The restrictions have sharply curtailed obtainable volumes — a lot of that are already locked into long-term contracts — leaving the spot market more and more constrained, wrote Cook dinner.
Market contributors count on additional positive factors, although analysts warning that such elevated costs may push some battery makers to speed up the shift towards cobalt-free chemistries resembling LFP.
Whereas the quota system has bolstered costs within the quick time period, the long-term outlook stays unsure.
Analysts be aware that cobalt’s destiny is more and more tied to copper market dynamics and the tempo of EV demand restoration, with downstream consumers and automakers reassessing cobalt’s position in next-generation batteries.
Don’t neglect to observe us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, maintain no direct funding curiosity in any firm talked about on this article.
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