Cobalt metal prices have trended steadily higher since September of last year, entering 2026 at US$56,414 per metric ton and touching highs unseen since July 2022.
The cobalt market staged a dramatic reversal in 2025, shifting from deep oversupply to structural tightening after decisive intervention by the Democratic Republic of Congo (DRC).
Prices began last year near nine year lows amid a lingering glut, but surged after the DRC, responsible for roughly three-quarters of global supply, imposed an export ban in February, later replaced by strict quotas.
By the end of the year, cobalt metal prices had more than doubled, underscoring how quickly supply-side policy reshaped market fundamentals. What emerged was not a demand-driven recovery, but a supply-led reset. Indonesian output, largely tied to nickel processing, helped cushion the shock but proved insufficient to replace lost Congolese units.
As inventories thinned and quotas capped future exports, the market exited 2025 near balance, setting the stage for a tighter and more volatile cobalt landscape heading into 2026.
Cobalt chokepoints: DRC dominance, China and the Lobito Corridor
With the concentration of cobalt output stemming from two nations, supply chain security has come into focus. An issue Roman Aubry, nickel and cobalt analyst at Benchmark Mineral Intelligence expects to last through 2026.
“2025 has demonstrated the risks associated with having a single country being
He added: “Looking ahead to 2026 it’s clear that the market has to anticipate continued uncertainty from the DRC. While they’ve announced a detailed quota system for the next two years, the DRC reserves the right to adjust it as it sees fit. Given the current ex-DRC cobalt stocks, Benchmark expects there to be significant risk of demand destruction as we approach the end of the year, therefore it is likely the DRC will need to adjust the export quota.”
Concern over China’s control of battery and critical metal supply chains is also likely to carry over through the year, as tensions between Washington and Beijing oscillate and the US looks to fortify its access to the metals.
Aubry pointed to the Lobito Corridor as a key factor in the US securing ex-China supply.
The major rail and port project linking the mineral-rich Copperbelt of the DRC and Zambia to Angola’s Atlantic coast, could reshape the global cobalt supply chain by lowering export costs, speeding transit times and diversifying routes away from China‑dominated infrastructure.
The US International Development Finance Corporation has committed hundreds of millions of dollars in funding to modernize the corridor’s rail and port facilities, potentially boosting annual transport capacity by an order of magnitude and cutting costs by as much as 30 percent compared with existing routes.
“In regards to Western-China relations, we’ve seen the US become increasingly conscious of its reliance on China refining for critical minerals, taking steps to improve ties with the DRC,” said Aubry. “This has mainly come in the form of a strategic agreement to develop the Lobito rail corridor, which would allow the DRC to export cobalt directly to the Atlantic, as well as the establishment of a coordinated Strategic Minerals Reserve within the DRC.”
Is cobalt substitution in the cards?
Before the DRC levied export controls over cobalt exports human rights and child labour concerns around artisinal cobalt extraction plagued the sector.
Paired with the supply chain challenges, battery manufacturers began shifting chemistry away from cobalt-rich formulas, like nickel-cobalt-manganese (NCM) and lithium-iron-phiosphate (LFP) began growing in market share.
In 2025, demand for nickel-cobalt-manganese (NCM) battery cells remained strong in markets focused on longer driving range and performance, particularly in North America and Europe, but lithium iron phosphate (LFP) cells continued their rapid ascent, driven by cost advantages and growing adoption in China and entry-level electric vehicles (EVs).
Industry forecasts project LFP’s share of global battery cell capacity to exceed 60 percent in 2025, reflecting broader shifts toward lower-cost chemistry amid affordability pressures, while NCM and lithium nickel cobalt aluminum oxide (NCA) cells continue to dominate premium segments where energy density remains critical.
Amid a shrinking EV market share, Aubry pointed to overall growth in the EV segment, as well as cobalt’s other end uses as factors likely to support demand.
“While battery chemistries are expected to shift towards lower-cobalt or cobalt- free chemistries, the volume of EV batteries is expected to more than offset this,” he explained.
“From all applications, cobalt demand is expected to grow almost 80 percent in the next decade,
He added: “Outside of the EV space, portables are an area of significant growth, particularly batteries for newer technologies like drones. Industrial applications also present a stable source of growth.”
Market volatility drives need for raw materials hedging
During a presentation at Benchmark Week 2025, Casper Rawles, COO at Benchmark Intelligence, highlighted the growing value of hedging for companies operating in the battery raw materials space.
According to Benchmark data, raw materials could account for 20 percent to 40 percent of battery costs by 2030, exceeding 50 percent for some chemistries.
For EV manufacturers such as BYD (OTCPL:BYDDF), annual spending on critical battery materials could exceed US$2 billion, leaving margins highly exposed to price swings.
Against that backdrop, Rawles underscored the need for more sophisticated hedging strategies, noting that shifts in sentiment, supply, demand and geopolitics can reprice these markets with little warning.
Hedging allows companies to manage commodity price volatility by offsetting exposure in the physical market with positions in the futures market.
Producers and consumers typically hedge either to lock in prices that protect margins or to secure fixed pricing tied to external contracts, buying or selling futures to counterbalance their underlying risk. In practice, firms can tailor these strategies to reduce price exposure partially or eliminate it altogether, depending on their risk tolerance.
As Rawles explained, cobalt’s 2025 price rebound emphasizes how exposed the market is to geopolitics, with the DRC’s export controls triggering a rapid reversal from oversupply to scarcity.
“Ultimately we saw an export quota being put in place. Now that quota is pretty limited,’ said Rawles.
‘When we think about the type of volumes we’re expecting to be needed by the market it’s really not going to be sufficient to fulfill market demand. That really shows how quickly the fortunes of these minerals can change,” he added, noting that the DRC’s dominance gives it outsized influence over global pricing.
Rawles stressed that cobalt volatility is no longer driven by supply and demand alone, but by sentiment and geopolitics, with major implications for battery makers and automakers, where raw materials account for a large share of costs.
“Even if you think you know the outlook at the start of the year, that can change in a heartbeat,” he said.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
