The cobalt market entered 2025 under pressure from a prolonged supply glut, but the balance shifted sharply as the year unfolded, due almost entirely to intervention from the Democratic Republic of Congo (DRC).
After starting the year near nine year lows of US$24,343.40 per metric ton, cobalt metal prices had risen to US$53,005 by the end of December, pushed upward by supply concerns stemming from export limits in the DRC.
“The cobalt market in 2025 was characterised by a significant price recovery following the DRC banning the export of all cobalt from its borders in February,” said Aubry. “By the end of 2025, sulphate prices increased 266 percent, hydroxide increased by 328 percent and metal prices by 130 percent year-to-date.”
Q1: Cobalt moves from glut to supply shock
As mentioned, cobalt metal prices hit their weakest level since 2016 in January. Global mine output had more than doubled over five years, far outpacing demand growth from electric vehicles and other end uses.
That dynamic changed abruptly in late February, when the DRC — which supplies roughly three-quarters of the world’s cobalt — imposed a four month suspension on cobalt hydroxide exports.
The news lifted cobalt from US$24,495 at the start of the year to above US$34,000 by the end of March, with intra-month highs nearing US$36,300. The move marked the sector’s first meaningful rebound in nearly two years.
As the DRC exhibited control over cobalt supply, the market began to look to the world’s second largest cobalt-producing nation: Indonesia. Indonesia’s cobalt output is largely a by-product of its laterite nickel industry, produced through high-pressure acid leaching (HPAL) plants that process nickel-rich ores.
These facilities generate mixed hydroxide precipitate (MHP), an intermediate containing both nickel and cobalt that can be further refined into battery-grade materials. The model has enabled Indonesia to rapidly scale its cobalt supply, leveraging its dominant nickel position and integrated processing infrastructure.
Indonesia produced about 31,000 metric tons of cobalt in 2024 — roughly 10 percent of global supply — cementing its position as the world’s second largest producer behind the DRC.
Output growth is being driven by HPAL projects targeting up to 500,000 tons per annum (tpa) of mixed hydroxide precipitate, potentially yielding 50,000 tpa of cobalt, though scaling up may prove challenging.
Indonesian MHP, a lower-cost intermediate that is rich in nickel and cobalt, is increasingly viewed by Chinese refiners as a substitute for DRC-sourced cobalt hydroxide.
Q2 and Q3: A fragile equilibrium forms
The DRC’s export ban continued to underpin prices through the second quarter.
Standard-grade cobalt metal was trading near US$15 to US$16 per pound at the time, while cobalt sulfate posted even sharper gains. Despite the rally, sentiment remained cautious. Chinese refiners drew on existing inventories, and trade data showed cobalt units still flowing into China, particularly from Indonesia.
By June, prices had begun to ease as uncertainty mounted over how long the DRC would maintain controls.
Although China imported significant volumes earlier in the year, analysts warned Indonesian supply would be insufficient to fully offset reduced DRC cobalt shipments. Later that month, the DRC extended its export restrictions through September, reinforcing expectations that the market would move toward balance.
By mid-year, Chinese import data confirmed the impact — cobalt hydroxide inflows had fallen sharply, with analysts projecting constrained refinery feed into late 2025 or early 2026.
Prices stabilized in a broad US$33,000 to US$37,000 range through Q3, supported by tightening supply and diminishing inventories. Market participants increasingly viewed the DRC’s actions as a structural shift rather than a temporary correction, signaling the end of the cobalt surplus that had defined the previous two years.
By late 2025, the cobalt market had transformed from one of chronic oversupply to one approaching equilibrium — a reset driven not by demand growth, but by decisive supply-side intervention.
Q4: Cobalt quotas replace DRC ban, prices climb
After months of supply disruption, the DRC lifted its full cobalt export ban in mid-October, replacing it with a rigid quota system that will shape the market through 2026.
Under the new framework, annual DRC exports are capped at about 96,600 metric tons, roughly half of 2024 levels, with just 18,125 metric tons scheduled for shipment in Q4 2025.
This structural tightening helped sustain elevated prices that surged above US$47,000 by late October, levels not seen since early 2023, amid persistent feedstock shortages and constrained exports.
DRC quotas have provided a degree of market clarity, with major producers like CMOC Group (OTCPL:CMCLF) receiving significant allocations that underpin production plans. Despite robust output guidance, inventories outside the DRC remain tight, and market participants see continued upward price pressure as the quota system curtails supply.
“The DRC’s quota system is set to squeeze supply in the next two years — unless the country revises quotas higher,” wrote Fastmarkets’ Oliver Masson in a December market update.
“Prices are already considerably higher than they were at the beginning of the year, and they are likely to remain elevated for as long as current quota levels remain in force,’ he said. ‘Cobalt is mostly used in batteries, and the longer prices remain elevated, the more likely it is that EV manufacturers will seek to move to low-cobalt or cobalt-free chemistries where feasible. This could slow demand in the medium term.”
Cobalt price forecast for 2026
Looking ahead to 2026, analysts see the cobalt market shifting into a deficit as export caps bite and global feedstock availability shrinks. Fastmarkets projects a structural shortfall of about 10,700 metric tons against demand near 292,300 metric tons, driven by DRC quota limits and ongoing drawdowns of stocks.
Industry forecasters also anticipate that reduced shipments, combined with a stubbornly tight pipeline, will support stronger average prices next year. Some forecasts suggest cobalt could average near US$55,000 in 2026 as export quotas supplant the 2025 ban. Indonesian supply is emerging as a secondary source, with production climbing, but most analysts agree it will be insufficient to offset DRC constraints in the near term.
After a year of dramatic swings driven by supply policy in the DRC, 2026 is shaping up as the first sustained deficit environment in the cobalt market, with prices expected to remain elevated amid structural tightening.
“Prices have substantially recovered over 2025 and are expected to remain elevated in 2026 as the DRC limits exports,” said Aubry. “There is a significant potential upside risk as dwindling ex-DRC stocks present the risk of demand destruction towards the end of the year.”
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
