Market diagnosis: The global cobalt market remains structurally supply-constrained through at least Q4 2027. The DRC's export quota system caps outbound cobalt at 87,000–96,600 mt/yr — approximately half of 2024 peak production. The June 30, 2026 forfeiture deadline passed, and H2 2026 enforcement is now the primary catalyst to watch. The July 5 customs platform glitch is now 16 days past but the resulting disruption has added administrative friction to Q3 quota utilisation. At $56,290/mt, LME CFD remains 167% above the February 2025 low and flat since January 2026. Fastmarkets projects ~10,700t deficit for 2026. The buyer position is DEFENSIVE: maintain term coverage at current levels. Asymmetric upside risk dominates.
The deficit is structural, not cyclical — driven by sovereign supply controls. Chinese smelters face feedstock gaps. Non-DRC supply cannot close the gap within 3 years. The dominant near-term catalyst is the pace of H2 2026 quota enforcement and whether the July customs platform disruption reduces effective shipments.