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. On August 6, 2026, a ministerial order (dated June 29) prohibiting copper and cobalt concentrate exports was disclosed, adding a second constraint to the quota framework. The June 30 forfeiture deadline has passed, and H2 2026 enforcement is now the primary catalyst to watch. At $56,290/mt, LME CFD remains 161% above the February 2025 low and flat since January 2026. Fastmarkets projects a ~10,700t deficit for 2026. The buyer position is DEFENSIVE: maintain term coverage at current levels. Asymmetric upside risk dominates — but demand-side weakness (LFP substitution, weak spot buying) caps the range.
The deficit is structural, not cyclical — driven by sovereign supply controls. Chinese smelters face feedstock gaps; China's electrolytic cobalt imports from DRC remain depressed. 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 August concentrate ban further reduces effective shipments.