Cobalt Price Surge Reshapes 2026 Supply Chain Strategy

Cobalt price momentum accelerated dramatically through late 2025 and into early 2026, hitting levels not seen in nearly four years. Starting 2026 at US$56,414 per metric ton, the market has fundamentally transformed from the deep oversupply crisis that plagued 2024. What triggered this reversal wasn’t rising demand—it was a decisive policy shift by the Democratic Republic of Congo (DRC), the world’s dominant cobalt supplier, responsible for roughly three-quarters of global output. When the DRC implemented export restrictions in February 2025, followed by strict quota allocations, the cobalt price trajectory reversed sharply. By year-end, prices had more than doubled, demonstrating how rapidly geopolitical intervention can restructure commodity markets. Indonesia’s nickel-linked cobalt production helped absorb some of the disruption, but proved insufficient to replace lost Congolese supply. As inventories tightened and export quotas locked in future supplies, the industry entered 2026 operating near balance—a precarious position that will define market behavior over the coming months.

Supply Chain Concentration: DRC’s Outsized Influence Over Cobalt Price Trends

The cobalt market now faces a defining vulnerability: excessive geographic concentration. With the DRC controlling supply flows and Indonesia representing the secondary source, the cobalt price landscape has become hostage to policy decisions in a single nation. Roman Aubry, nickel and cobalt analyst at Benchmark Mineral Intelligence, emphasized that this risk will persist throughout 2026. “The market has demonstrated the risks of depending on one country for the majority of supply,” Aubry noted. “The DRC has announced detailed quota frameworks for the next two years, but reserves the right to adjust them based on market conditions. Given current ex-DRC inventory levels, Benchmark anticipates significant downside pressure as 2026 progresses, likely forcing the DRC to recalibrate its cobalt price stabilization quotas.”

The strategic importance of diversifying export routes has become impossible to ignore. The Lobito Corridor—a transformative rail and port infrastructure project linking the mineral-rich regions of the DRC and Zambia directly to Angola’s Atlantic coast—represents the Western strategy to circumvent China-dominated shipping networks. The US International Development Finance Corporation has committed hundreds of millions of dollars to modernize facilities, with projections showing annual transport capacity could increase substantially while reducing logistics costs by as much as 30 percent. For cobalt price stability, this infrastructure matters enormously. It offers an alternative to China-controlled refining hubs, reshaping how cobalt reaches global battery makers and reducing the geopolitical leverage any single nation or shipping bloc can exert over cobalt price dynamics.

“The US has grown acutely aware of its reliance on Chinese infrastructure for critical minerals refining,” Aubry explained. “This has manifested in strategic cooperation with the DRC—not just on the Lobito Corridor development, but through establishing a coordinated Strategic Minerals Reserve within Congo itself.” These initiatives signal recognition that cobalt price volatility will intensify unless supply chains diversify beyond existing chokepoints.

Battery Chemistry Evolution: Substitution Pressures and Cobalt Demand Resilience

While geopolitical risk dominates headlines, a quieter shift is reshaping cobalt’s long-term demand picture. Battery manufacturers, spurred by human rights concerns and supply chain uncertainty, have accelerated their pivot away from cobalt-intensive chemistries like nickel cobalt manganese (NCM). Lithium iron phosphate (LFP) batteries, superior on cost metrics and increasingly adopted across China and entry-level EV segments, are capturing market share at a striking pace. Industry forecasts project LFP will account for over 60 percent of global battery cell production capacity in 2025, reflecting the industry’s cost-consciousness amid affordability pressures.

Yet cobalt’s fundamental demand outlook remains surprisingly robust. Premium vehicle manufacturers—particularly in North America and Europe, where range and performance remain critical—continue favoring NCM and nickel cobalt aluminum (NCA) chemistries. More importantly, cobalt demand extends far beyond electric vehicles. “While battery chemistries shift toward lower-cobalt formulas, the absolute volume of EV production is expected to more than compensate,” Aubry explained. “Cobalt demand across all applications is forecast to grow nearly 80 percent over the next decade. Beyond batteries, portable device applications and industrial uses—especially emerging technologies like drone batteries—represent substantial growth vectors.” This structural demand growth suggests cobalt price appreciation could extend well into 2026 and beyond, even as NCM’s market share contracts.

Why Cobalt Price Volatility Demands Sophisticated Risk Management

The cobalt market’s 2025 trajectory exposed a critical vulnerability: extreme price sensitivity to geopolitical shocks rather than fundamental supply-demand dynamics. Casper Rawles, Chief Operating Officer of Benchmark Mineral Intelligence, highlighted this reality during a recent industry presentation, noting that raw materials could represent 20 to 40 percent of battery production costs by 2030—exceeding 50 percent for certain chemistries. For major EV manufacturers like BYD, annual spending on critical battery materials could surpass US$2 billion, leaving profitability dangerously exposed to cobalt price swings.

“The DRC’s export quotas are genuinely constraining,” Rawles emphasized. “When we model the volumes the market will require against what quotas actually allow, we see a significant gap. Fortunes in these minerals change overnight.” Cobalt price movements are no longer driven solely by supply and demand curves—they’re increasingly shaped by political sentiment, geopolitical tensions between Washington and Beijing, and policy reversals that can reshape markets within weeks.

Hedging has transitioned from a nice-to-have to an operational necessity. Through futures market positions, battery makers and automakers can lock in stable cobalt price levels that protect manufacturing margins and honor fixed-price contracts with end customers. “Even if you believe you understand the outlook at year-start, cobalt price movements can reverse that conviction in a heartbeat,” Rawles cautioned. For any company where raw materials represent a meaningful cost percentage, developing sophisticated cobalt price hedging strategies tailored to specific risk tolerance levels has become essential for competitive survival in 2026.

The cobalt market enters 2026 as a study in structural transformation: tighter supply, elevated geopolitical risk, shifting battery chemistries, and volatile pricing that rewards strategic risk management. Whether cobalt price levels stabilize or fluctuate further will likely depend less on consumption patterns and more on DRC policy continuity and the success of Western supply chain diversification efforts through projects like the Lobito Corridor.