The Cobalt Market: A New Era of Strategic Competition

This article draws on cobalt market data and analysis from the Cobalt Institute (source linked at the end).

Cobalt underpins much of modern industry, used in products ranging from batteries and cutting tools to ceramics, paints, superalloys, and magnets. In recent years, though, it has taken on a new dimension: as nations compete to secure supply chains for defense, technology, and the clean energy transition, cobalt has become a focal point of geopolitical rivalry.

Tracking the cobalt market today therefore means more than following commodity fundamentals. It means understanding a fast-moving, high-stakes environment where strategic competition increasingly shapes outcomes.

Given this volatile and uncertain backdrop, Shu Powders is sharing an in-depth update on the global cobalt industry with our stakeholders, to support informed decisions in a complex and strategic market.
 

Key Takeaways

Supply

• Mined cobalt output held steady at roughly 270kt in 2025, with the DRC accounting for close to 75% of global supply.
• A DRC export ban, later replaced by a quota system, sharply curtailed how much cobalt reached international markets.
• Indonesia’s output expanded quickly, positioning it as a major alternative source of supply.
• As exports were restricted, cobalt built up in DRC stockpiles even as supply tightened elsewhere.
• Recycled and secondary cobalt supply is expanding, though it remains a modest and geographically uneven contributor.

Demand

• Total demand climbed to around 276kt, up roughly 13% year-on-year, with electric vehicles making up the largest share at about 39%.
• Batteries remained the primary driver of demand, helped by robust gigafactory production even as EV sales varied by region.
• Demand from defense and aerospace also grew, underscoring cobalt’s strategic value for national security.
• China continued to anchor global battery manufacturing and cobalt consumption.

Prices

• DRC export restrictions pushed cobalt prices sharply higher across the board in 2025.
• Cobalt hydroxide prices more than quadrupled, while sulphate and metal prices also posted strong gains.
• Restricted exports flipped the market from apparent oversupply into an effective shortage.
• Policy, rather than underlying demand, increasingly set the pace for prices.
• Tighter stockpiles and growing procurement uncertainty added to market volatility.

Outlook

• Rivalry among major powers deepened, especially across the African Copperbelt, as both sides turned to more interventionist policy to secure critical mineral supply.
• Supply in 2026 remains constrained by the DRC’s quota system, with a new threat emerging from rising sulphur and energy costs linked to the Iran conflict.
• Indonesian producers are especially vulnerable here, since roughly 75% of the country’s sulphur supply comes from the Middle East via the Strait of Hormuz.
• The DRC’s quota system is set to remain a key driver of prices.
• Supply is expected to rise, with Indonesia leading the growth.
• Even so, cobalt’s central role in batteries, defense, and industrial uses keeps the long-term outlook broadly positive.

 

Cobalt Market Analysis

Supply

Overall cobalt supply came in just under 300kt in 2025, though mined output itself barely moved, staying close to 270kt globally. The DRC held onto its position as the dominant miner, supplying nearly three-quarters of the world’s cobalt, while Indonesia consolidated its place as the number-two producer, with output climbing past 40kt, a gain of about 30%. Yet what really defined the year wasn’t how much was mined, it was the policy decisions that shaped how much of it actually reached the market.

The DRC government banned cobalt exports outright in February 2025, before later replacing the ban with a quota system that now runs through 2027. Mining itself carried on largely unaffected, but the export restrictions choked off how much material could leave the country, causing cobalt to pile up in domestic stockpiles even as buyers outside the DRC faced a squeeze. It’s a shift with real staying power: availability is now dictated far more by policy than by how much is actually dug out of the ground.

Indonesia, by contrast, faced no such constraints, and its unimpeded output ended up exceeding what the DRC was able to export in 2025, effectively making Indonesia the market’s largest working supplier of cobalt. Looking ahead, Indonesia is projected to lead global supply growth over the next five years, ahead of the DRC, and it has already overtaken Canada to become the third-largest supplier of refined cobalt.

Demand

Demand kept climbing through 2025, reaching roughly 276kt, a rise of about 13%. Batteries drove most of that growth, with electric vehicles alone accounting for close to 39% of total demand, while portable electronics also bounced back strongly. Outside of batteries, rising demand from the defense and aerospace sectors further cemented cobalt’s role in national security and advanced technology.

Prices

The export ban and the quota system that followed hit prices hard. Crude cobalt hydroxide, a byproduct of copper mining in the DRC that serves as the main feedstock for cobalt refineries, saw prices climb more than 300% over the course of the year. That surge had little to do with demand; it was almost entirely a function of tightening supply and uncertainty over how much material would actually be allowed to leave the DRC.

In effect, the market flipped from a structural surplus to a deficit once DRC exports are excluded, a clear sign of how much geopolitics and regulation now shape pricing. Refined output edged up modestly, to about 240kt, roughly 5% growth, with China still responsible for close to 80% of the world’s total.

Scarce hydroxide feedstock combined with uneven demand for refined product meant prices didn’t move in lockstep across cobalt products, and for a time, hydroxide even traded above the price of refined cobalt metal.

Outlook

Geopolitics took on a bigger role in the cobalt market throughout 2025. Major powers competed more intensely, particularly over the African Copperbelt, and both sides leaned further into interventionist policy to lock down access to critical minerals, a trend that speaks to cobalt’s growing significance where energy transition, industrial policy, and national security intersect.

The DRC’s quota system is still weighing on supply into 2026, and a fresh risk has emerged alongside it: rising sulphur and energy costs stemming from the ongoing Iran conflict. Indonesian producers stand out as particularly exposed here, given that around 75% of the country’s sulphur is sourced from the Middle East and shipped through the Strait of Hormuz. Should supply stay constrained, some producers may be forced to scale back production.

Demand fundamentals remain solid, but 2025 made clear that the cobalt market has undergone a structural shift. Policy decisions, concentrated supply, and geopolitical maneuvering are now doing more to shape outcomes than fundamentals alone, adding volatility and uncertainty along the way. Still, cobalt’s central role in batteries, defense, and industrial applications keeps the longer-term outlook broadly positive.

 

Conclusion

Cobalt is entering a phase where policy choices, geopolitical developments, and supply chain resilience matter just as much as traditional supply-and-demand fundamentals. For companies across the value chain, getting a handle on these dynamics will be essential to managing risk and making sound strategic calls.
Shu Powders remains committed to tracking these shifts closely and sharing practical, timely analysis as the global cobalt industry continues to respond to changing geopolitical, economic, and industrial conditions.

Source: Cobalt Institute, Cobalt Market Report 2025,
https://www.cobaltinstitute.org/resource/cobalt-market-report-2025/.