Market diagnosis: The global cobalt market remains structurally supply-constrained through 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 11, ARECOMS confirmed the quota framework stays unchanged, ruled out additional volumes, and flagged a possible quota REDUCTION if the supply-demand imbalance persists. The August 6 concentrate export ban adds a product-form constraint (BMI: limited incremental impact — hydroxide dominates). At $56,290/mt, LME CFD remains 161% above the February 2025 low and flat since January 2026; the LME Fastmarkets MB Month-2 close is $54,410/t (Aug 15). A uranium-in-cobalt probe (Kinshasa investigation opened Aug 7) adds logistics friction risk. Fastmarkets projects a ~10,700t deficit for 2026. The buyer position is DEFENSIVE: maintain term coverage at current levels. Asymmetric upside risk dominates — but weak Chinese spot demand (sulfate at CNY 70,000-76,000/t) and LFP substitution cap the range.
The deficit is structural, not cyclical — driven by sovereign supply controls. Chinese smelters face feedstock gaps; spot sulfate prices fell to CNY 70,000-76,000/t (Mysteel Aug 17) on shadow-inventory digestion and expected DRC intermediate arrivals. Non-DRC supply cannot close the gap within 3 years. The dominant near-term catalyst is ARECOMS' quota stance: a reduction tightens; a cap lift toward 120,000t (BMI 2027 view) eases. Uranium-probe border processing is the secondary watch item.