The cobalt market is experiencing significant turbulence as prices have surged due to ongoing supply constraints, stemming from the Democratic Republic of the Congo (DRC)’s extended export quotas and artisanal mining crackdowns. Prices have doubled recently, highlighting a market entering a deficit phase, according to NACM.
Market Action: Price Movements and Supply Dynamics
Since January 2026, cobalt prices have strengthened significantly. The DRC, accounting for over 70% of global cobalt supply, has set export quotas at 96,600 tonnes annually through 2027, with 9,600 tonnes allocated to reserves. This decision, coupled with disruptions from crackdowns on artisanal mining, has tightened supply. As a result, cobalt prices have seen a marked increase, stabilizing at elevated levels as the market adjusts to these constraints.
Analysis: Drivers Behind the Price Surge
The increase in cobalt prices is primarily driven by supply-side issues. The DRC’s export management, aimed at stabilizing and potentially increasing future revenues, has caused immediate supply bottlenecks. These efforts have been compounded by weaker cobalt intermediate arrivals in China during the first quarter of 2026, leading to downstream shortages and expanded margins for cobalt chloride and Co3O4. According to Mysteel, this period has seen the market shift to a premium for electrolytic cobalt over intermediates.
Context: Broader Market Implications
The cobalt market’s current dynamics reflect broader trends in the battery metals sector, where demand continues to rise due to the burgeoning electric vehicle (EV) market. Despite a transition towards lithium iron phosphate (LFP) batteries, cobalt remains crucial for high-performance battery applications. However, the anticipated growth in cobalt recycling, projected to cover 25% of demand by 2035, could gradually mitigate some of these supply pressures in the long term, as noted by NMA-TV.
Outlook: What to Watch Next
Investors and industry stakeholders should closely monitor upcoming policy changes in the DRC, as well as developments in cobalt recycling technologies, which could alleviate some supply constraints over the next decade. Additionally, the market is likely to respond to shifts in EV manufacturing trends and battery technology advancements, potentially influencing future demand for cobalt and other battery metals.
While cobalt prices remain high, the market’s volatility underscores the need for strategic planning and diversification in sourcing strategies for battery manufacturers. As the global energy transition accelerates, stakeholders must navigate these challenges with agility and foresight.
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