The Democratic Republic of Congo (DRC) continues to dominate cobalt's price narrative. Having produced an estimated 73% of the world's mined cobalt in 2025, the DRC's policy decisions have an immediate, outsized impact on global prices. After a four-month export ban in early 2025 was replaced by a quota system in October, cobalt hydroxide exports are now capped at 96,600 tonnes for 2026 — less than half of 2024 production levels, according to S&P Global Market Intelligence.
The administrative machinery has been as disruptive as the policy itself. No exports left the DRC from June 2025 onwards, and Q4 2025 quotas rolled over into Q1 2026 with no clear dispatch timeline, compounding the supply crunch. Chinese refineries — which process approximately 78% of global refined cobalt per the IEA — have borne the full brunt of the feedstock shortage, driving NE Asian cobalt prices from US$24.11/kg in Q1 2025 to US$67.42/kg in Q1 2026, a 180% surge.
Prices have eased modestly from their Q1 peaks but remain structurally elevated. Cobalt metal entered 2026 at US$56,414/t, and April 2026 refined prices were near US$60,400/mt in China and India, per Procurement Resource. The IEA notes that cobalt prices roughly doubled over 2025, and price strength is persisting into 2026 as stockpiles bought at lower prices are drawn down. Fastmarkets projects a structural shortfall of approximately 10,700 tonnes against demand near 292,300 tonnes in 2026.
Indonesia is the fastest-growing counterweight to DRC dominance. Indonesian cobalt production reached 38,324 tonnes in 2025, mainly as a by-product of nickel HPAL (high-pressure acid leach) operations. Output is forecast to climb 39.1% to approximately 53,318 tonnes in 2026, according to AZO Mining. Cobalt has shifted from a by-product afterthought to a critical margin driver for Indonesian producers, particularly as nickel prices languish. However, Indonesia cannot fully neutralize DRC disruptions — if DRC shipments fall to 70,000-80,000 tonnes, even Indonesian growth leaves a significant supply gap.
Battery chemistry shifts are the demand-side wildcard. Lithium iron phosphate (LFP) batteries have expanded their market share significantly, and nickel-manganese-cobalt (NMC) cathodes continue to reduce cobalt intensity. But cobalt-containing chemistries remain essential for high-energy EVs, consumer electronics, and aerospace applications. Non-battery demand — superalloys, defense, cutting tools — provides a resilient floor that is less price-sensitive and prioritizes security of supply above all else.
The IEA warns that sustained high cobalt prices risk reversing battery cost declines. Average battery prices fell 8% in 2025, supported by manufacturing efficiencies and chemistry shifts. But if lithium and cobalt price spikes persist, "stockpiles of minerals purchased at lower prices are being drained," per the IEA's Global EV Outlook 2026. This could put upward pressure on battery pack costs and accelerate the adoption of low- and no-cobalt chemistries over the medium term.
Cobalt procurement in H2 2026 requires a multi-layered approach. DRC concentration risk is extreme — 73% of mined supply controlled by a single country with an unpredictable policy environment. The 96,600t quota cap means the market will remain in or near deficit through at least year-end. Diversify geography: increase exposure to Indonesian, Canadian, Australian, and US supply where possible, even at premium prices. Lengthen contract tenor with multi-year offtake agreements to lock in volume. Use index-linked pricing mechanisms referenced to regional benchmarks rather than global averages. Coordinate with battery chemistry teams to evaluate LFP or low-cobalt NMC options where performance requirements allow. For defense and aerospace buyers, priority should be supply security over price — build 6-9 months of strategic inventory. Implement responsible sourcing frameworks with third-party verification, as downstream OEMs and regulators increasingly mandate ESG-compliant cobalt. Monitor DRC political developments closely — any renewed export halt or quota revision would likely trigger another price spike from already elevated levels.