How DRC Supply Controls Reshaped the Cobalt Market in 2025 — A Cobalt Price Forecast Review

The cobalt market entered 2025 facing chronic oversupply, but experienced a dramatic structural transformation driven almost entirely by supply-side policy intervention from the Democratic Republic of Congo. Starting the year near nine-year lows of US$24,343.40 per metric ton, cobalt prices surged to US$53,005 by year-end—a 118% rally propelled by export restrictions that shifted market dynamics from persistent glut to emerging scarcity. This reshaped cobalt market in 2025 represents the most significant pivot for the industry in years, with profound implications for the 2026 outlook.

From Oversupply Crisis to Supply Shock: Q1’s Critical Turning Point

The cobalt market opened 2025 drowning in excess inventory. Global mine production had doubled over five years, vastly outpacing demand growth from electric vehicles and other industrial applications. Prices languished near their weakest levels since 2016, signaling a prolonged structural imbalance.

That trajectory reversed abruptly in late February when the DRC—responsible for roughly three-quarters of global cobalt supply—announced a four-month suspension on cobalt hydroxide exports. This policy shift sent shockwaves through the market. By March’s close, cobalt metal prices had rallied from US$24,495 at year-start to above US$34,000, with intra-month peaks approaching US$36,300. The sector logged its first meaningful rebound in nearly two years, signaling that the oversupply narrative had fundamentally broken.

According to Benchmark Intelligence analyst Roman Aubry, this policy intervention proved transformative. “The cobalt market in 2025 was characterised by a significant price recovery following the DRC banning the export of all cobalt from its borders in February,” Aubry explained. By quarter’s end, the price escalation was striking: sulphate prices jumped 266%, hydroxide climbed 328%, and metal prices rose 130% year-to-date.

Indonesia’s Growing but Limited Substitute Role

As DRC export curbs tightened, global attention pivoted to the world’s second-largest cobalt producer: Indonesia. Unlike the DRC’s direct cobalt mining, Indonesia’s supply flows primarily from nickel laterite processing through high-pressure acid leaching (HPAL) plants. These facilities generate mixed hydroxide precipitate (MHP)—an intermediate containing both nickel and cobalt—that Chinese refiners increasingly viewed as a substitute for scarce DRC-sourced material.

Indonesia’s 2024 cobalt output reached approximately 31,000 metric tons, roughly 10% of global supply. Ongoing HPAL expansion targets up to 500,000 tons per annum of MHP production, potentially yielding 50,000 tons of cobalt annually. However, industry observers recognized critical constraints: while Indonesian supply rising, it remained insufficient to offset the magnitude of reduced DRC shipments.

“The lack of cobalt hydroxide availability in the wider market has had a knock-on effect into Indonesia, which has been able to take advantage of higher cobalt prices,” Aubry noted. Chinese refiners drew strategically on existing inventories through early 2025, with trade data confirming cobalt units still flowing into China primarily from Indonesia. Yet this partial offset proved temporary as the equilibrium shifted.

Supply Tightening Creates Fragile Balance: Q2-Q3 Market Stabilization

The DRC’s export restrictions continued supporting prices through the second quarter, with standard-grade cobalt metal trading near US$15-16 per pound and sulphate posting even sharper gains. Yet sentiment remained cautious amid uncertainty over the ban’s duration.

By June, prices began easing as traders questioned whether DRC controls would persist. However, that month brought clarity: the DRC extended its export restrictions through September. This extension signaled to the market that the policy represented a structural shift rather than temporary correction—the end of the two-year cobalt surplus era had begun.

Chinese import data confirmed the impact’s severity. Cobalt hydroxide inflows to China had collapsed, with analysts projecting constrained refinery feedstock through late 2025 or early 2026. Prices stabilized within a broad US$33,000-37,000 range through Q3, supported by progressively tightening supply and diminishing inventories outside the DRC.

By late summer, market consensus had solidified: the DRC’s intervention had reset the cobalt market from one of chronic excess to one approaching equilibrium—a transformation driven not by demand acceleration but by decisive supply-side constraint.

Quota System Replaces Ban: Q4’s Structural Tightening

After months of full export suspension, the DRC lifted its ban in mid-October 2025, replacing it with a rigid quota framework set to shape market dynamics through 2026. Under the new structure, annual DRC cobalt exports face a ceiling of approximately 96,600 metric tons—roughly half of 2024 shipment levels—with only 18,125 metric tons allocated for Q4 2025 delivery.

This structural tightening proved immediately bullish. Cobalt prices surged above US$47,000 by late October, levels unseen since early 2023, amid persistent feedstock scarcity and constrained logistics. Major producers including CMOC Group received significant quota allocations, which provided temporary market clarity despite the fundamental supply contraction.

Nevertheless, inventories outside the DRC remained critically tight. Market participants widely anticipated continued upward price pressure as the quota mechanism curtailed supply relative to underlying demand needs.

Fastmarkets analyst Oliver Masson captured the market dynamic in a December update: “The DRC’s quota system is set to squeeze supply in the next two years — unless the country revises quotas higher. Prices are already considerably higher than they were at the beginning of the year, and they are likely to remain elevated for as long as current quota levels remain in force.”

However, structural price elevation carries downstream risks. EV manufacturers facing higher cobalt input costs may accelerate transitions toward low-cobalt or cobalt-free battery chemistries where technically feasible, potentially restraining longer-term demand growth and complicating the cobalt price forecast for successive quarters.

2026 Outlook: Structural Deficit and Elevated Prices Ahead

Looking toward 2026, the cobalt market appears poised to transition from precarious equilibrium to structural deficit. Fastmarkets projects a supply shortfall of approximately 10,700 metric tons against anticipated demand near 292,300 metric tons—driven by DRC quota caps and ongoing depletion of off-shore stocks accumulated during the oversupply years.

Industry forecasters broadly anticipate that curtailed shipments combined with stubbornly tight distribution pipelines will support materially stronger average prices throughout 2026. Certain analysts project cobalt could average near US$55,000 during 2026 as DRC export quotas sustain the pricing support that 2025’s ban initiated.

Indonesian production continues climbing and will represent an increasingly important secondary supply source. However, most market participants concur that Indonesian volumes, while rising, will prove quantitatively insufficient to materially offset DRC constraints in the near-to-medium term.

Aubry concluded: “Prices have substantially recovered over 2025 and are expected to remain elevated in 2026 as the DRC limits exports. There is a significant potential upside risk as dwindling ex-DRC stocks present the risk of demand destruction towards the end of the year.”

The cobalt market’s 2025-2026 transition thus reflects a fundamental reset: after years defined by oversupply anxiety, the industry now confronts a cobalt market shaped by supply scarcity, with the cobalt price forecast for coming years anchored to DRC policy decisions and their cascading impacts on the global EV supply chain.