Cobalt Market Update: Q2 2025 in Review

DRC extends cobalt export controls

After plunging to a nine year low in late January and then rebounding to multi-year highs by the end of Q1, cobalt prices began to ease in early June as supply uncertainty weighed on the market.

Despite the export ban in the DRC, trade data from China showed a significant influx of cobalt in April.

The country's imports of cobalt metal rose 60 percent month-on-month, driven largely by Indonesian supply, while its exports of cobalt metal surged 202 percent year-on-year.

"We are still seeing cobalt units arriving in China — or at least we were in May, which is the last month for which trade data were available,” said Olivier Masson, principal analyst at Fastmarkets, during a June presentation at his company's Lithium Supply & Battery Raw Materials event, held in Las Vegas.

According to Masson, China imported 75,000 metric tons of cobalt from the DRC in the first five months of 2025, along with another 22,000 metric tons of mixed hydroxide precipitate (MHP).

Of the MHP amount, 17,000 metric tons came from Indonesia, a region that is becoming increasingly important to the cobalt sector, especially now that the DRC has extended its export controls into September.

Although Indonesia is projected to increase its output, “the supply of cobalt from Indonesia is not going to be large enough to offset the loss of supply from the DRC,” said Masson.

Cobalt supply expected to slow in H2

Cobalt supply has surged over the past five years, with global mine production more than doubling from 140,000 metric tons in 2020 to 290,000 metric tons in 2024. This rapid growth has far outpaced demand from the electric vehicle (EV) sector and other end-use industries, resulting in a significant market oversupply.

However, with the DRC — which accounts for roughly 70 percent of global cobalt production — extending its export limitations into the second half of the year, mine supply is expected to register more muted gains in 2025.

“We expect mine supply growth to slow this year,” said Masson. “Prices are at multi-year lows, and yet, despite that, we still saw relatively strong growth numbers from major producers in the country.”

With exports stalled, inventories are building up in the DRC, a dynamic that may force operational adjustments.

“We might see miners who principally produce copper — and get cobalt as a by-product — start mining lower-grade cobalt ores in order to manage the inventories that are piling up,” Masson explained.

He added that cobalt sulfate demand slowed in 2024 due to a weaker-than-expected EV market in the west.

In response, Chinese refiners pivoted to producing cobalt metal, significantly impacting global trade dynamics.

“Just like they did for nickel, Chinese refiners switched to cobalt metal production,” Masson said. “As a result, we’ve seen cobalt metal exports out of China jump by over 230 percent from January to May.”

Masson went on to explain: “This level of export growth is likely unsustainable. There’s limited feedstock coming from the DRC due to the export ban, and that will inevitably constrain Chinese production going forward.”

Strategically diversifying supply

As the global market looks ahead, geopolitical dynamics are taking on greater significance.

The US, which is seeking to secure non-Chinese sources of critical minerals, is engaged in negotiations with the DRC. At the same time, it’s backing infrastructure development, including support for the Lobito Corridor, a rail and port route that would allow DRC-sourced cobalt to be exported via the west coast of Africa, bypassing China entirely.

“Currently, about 83 percent of the DRC’s cobalt exports go to China,” Masson said.

“But both the DRC and the US are motivated to diversify those flows.”

However, the US still lacks sufficient domestic precursor cathode active material capacity, a key step in the battery supply chain, which could limit its ability to process cobalt independently in the short term.

Looking at the cobalt market more broadly, Masson said Fastmarkets expects supply to remain “adequate” in the near term. But with inventories outside the DRC being steadily drawn down, tighter conditions could emerge later this year.

“By August or September, we could start to see the market tightening,” he said. “Our price forecast before the export ban was extended … but now, there’s potential for prices to remain elevated longer than previously expected.”