The Democratic Republic of Congo, the world’s leading cobalt producer, has imposed new export restrictions for 2026, replacing a previous ban with an annual quota system capped at 96,600 metric tons. This volume represents less than half of the country’s 2024 production, which accounted for 74.5% of global supply, according to S&P Global Market Intelligence data.
The decision has been seen by market participants as a major disruption. The announced quotas fall well short of industry expectations and risk triggering a structural cobalt deficit, leading to upward price pressure. Following the announcement, the cobalt hydroxide CIF China price surged 69.9% between September 21 and December 9, reaching $54,674.58 per metric ton. S&P Global CERA analysts forecast European metal prices to peak in the first quarter of 2026 before gradually easing under the new export regime.
Restricted supply and market stress
The Congolese restrictions have caused a sharp drop in shipments to China, the country’s main customer. In October, China’s imports of Congolese cobalt hydroxide fell 86.9% to 6,346 metric tons, down from 48,608 metric tons in May. Most shipments remain undelivered, intensifying pressure on global stockpiles.
Meanwhile, producers are withholding sales in anticipation of higher prices, fuelling widespread destocking. Uncertainty over available volumes is increasing price volatility and complicating planning for industries dependent on cobalt, especially battery and electronics manufacturers.
Indonesia’s gradual emergence
Amid the disruption, Indonesia is emerging as a potential supply centre. The country’s mined cobalt output is projected to rise 39.1% in 2026 to reach 53,318 metric tons, with a further 25.3% increase expected in 2027. This growth is tied to the phased commissioning of high-pressure acid leach nickel facilities, with 658,000 metric tons of annual capacity under construction.
However, with refined nickel prices falling to $14,073.74 per metric ton in December, investment incentives remain limited. Actual output may therefore fall short of targets.
Recycling and technology alternatives
Simultaneously, China’s recent approval of black mass imports has boosted recycling prospects as a means to offset shortages. According to a 2024 report by S&P Global Mobility, cobalt recovery rates from recycled materials can exceed 95%, depending on the technology used.
Prolonged high prices are also driving the shift toward lower-cobalt or cobalt-free technologies. Automaker Tesla has reduced the cobalt content in its batteries since 2020. Lithium iron phosphate batteries, which contain no cobalt, are increasingly adopted in electric vehicles.
In 2025, the battery sector accounted for 70% of global cobalt consumption, divided between consumer electronics (37%) and vehicle batteries (33%). Cobalt usage in electric vehicles fell short of expectations as nickel-cobalt-manganese batteries were increasingly replaced by lithium iron phosphate alternatives.
