Cobalt Market Trends: H1 2026 Review and Forecast

From oversupply to a government-managed squeeze

The turnaround marks a dramatic reversal from conditions just two years ago. Searle noted that DRC mine supply nearly doubled between 2021 and 2025, rising from around 150,000 metric tons to close to 300,000 metric tons as Chinese-backed copper-cobalt miners expanded capacity to lock in concentrate for their own refineries.

That growth wasn’t matched by demand, and cobalt prices collapsed to multi-year lows by late 2024 and early 2025, a level Kinshasa judged uneconomic for a resource it considers strategically critical.

The government’s response came in two waves.

An export ban on February 21, 2025, sparked an initial price surge, though shipping lags delayed the volume impact.

A sharper price hike occurred in October 2025, when the DRC introduced a producer-specific quota system.

The move saw standard prices spike to US$41,879.80 per metric ton, according to TradingEconomics, representing a 71 percent increase from January 2025’s level of US$24,424.40.

The country further flexed its grip on the sector in June of this year, when it announced that unused export quota amounts would not roll over and instead would be reclaimed by the government.

Indonesia can’t plug the cobalt gap

A recurring question has been if Indonesia’s nickel-cobalt by-product stream could offset lost DRC tonnage.

The answer, according to Searle, is no. Indonesian cobalt-bearing mixed hydroxide precipitate exports to China have topped out at roughly 3,000 metric tons a month, a fraction of what’s been lost from the DRC.

Even so, Fastmarkets expects the DRC’s share of global mine supply to gradually decline from a dominant position today to around 58 percent by 2036, as Indonesia and other jurisdictions diversify the supply base over time.

Middle East adds new cobalt cost layer

Both Searle and Daswani flagged the ongoing Middle East conflict as a fresh complication for the whole battery raw materials complex, cobalt included. Prices for sulfuric acid, which is a critical reagent for processing both nickel and cobalt alike, have spiked as the region accounts for more than a quarter of global sulfur supply, with Indonesia alone sourcing around three-quarters of its sulfur needs from the Middle East.

Daswani listed this issue, alongside elevated freight and insurance costs and broader energy-driven cost inflation, as one of four interconnected pressures now baked into the cost structure for battery metals production.

“Sulfuric acid is a vital input to lithium, to nickel and cobalt production, and even if there is a welcome end to the conflict, sulfur normalization, like everything related to the Middle East, will take time,” he said.

“It’s not going to happen overnight; restarts will have to be timed and will take time to ramp up … There’s going to be a lag of several months, whichever way you look at it. So it’s not a passing shock, it’s a persistent market force. We can expect to see running its course throughout the rest of this year.”

Demand: Growing, but increasingly thrifted

On the demand side, cobalt’s growth outlook remains positive, but comparatively modest.

Searle’s forecast points to roughly 5 percent annual demand growth to 2036, slower than both manganese and lithium, even as the battery sector’s share of total cobalt consumption is expected to rise to around 84 percent over the same period. The flip side of that slower growth, he noted, is a tailwind for a different cathode input altogether.

“The thrifting of cobalt has led to more interest in manganese,” he told delegates, pointing to high-purity manganese demand from the electric vehicle sector growing at an 18 percent CAGR out to 2036.

Today’s dominant nickel cobalt manganese (NCM) chemistries (the 622, 111 and higher-nickel 9-series lines) account for nearly all current electric vehicle battery demand, but Searle expects that base to grow only modestly over the next decade as the industry shifts toward higher-manganese loadings.

He pointed to next-generation options, including high-voltage NCM 613 formulations under development in China and South Korea, as well as lithium manganese iron phosphate, which is gaining traction as a mid-energy-density option. In addition, lithium- and manganese-rich chemistries are being explored by General Motors (NYSE:GM) and Ford (NASDAQ:F) as North American automakers look to reduce their reliance on China-dominated supply chains.

Cobalt isn’t disappearing from batteries, in other words, but its share of each pack keeps shrinking.

Policy backdrop continues to harden

Both presentations underscored how geopolitics is now as important as geology in shaping the market.

Daswani pointed to Project Vault, a US initiative announced in February that committed more than US$10 billion to a strategic critical minerals reserve, alongside roughly US$15 billion in letters of interest issued by the Export-Import Bank spanning rare earths, lithium, cobalt, nickel, tin and tungsten.

New “prohibited foreign entity” rules and tariff regimes are reshaping which projects get funded and on what terms, while a 54 country critical minerals ministerial and the resulting Forge Partnership are aimed at reducing western reliance on Chinese and Russian processing capacity.

Cobalt market forecast for 2026

As sourcing new material becomes more challenging, questions have been raised about recycling or reclamation.

When asked whether reprocessing old tailings could ease cobalt supply tightness, Searle noted that interest in reprocessing legacy DRC and Australian cobalt stockpiles cooled during the recent price downturn, but could resurface if current price levels prove durable rather than temporary.

With DRC quotas showing no sign of near-term relaxation, the sulfuric acid sourcing issues and Chinese import volumes only just beginning to normalize, cobalt market tightness is likely to persist through the remainder of 2026.