How DRC's Policy Shifts Reshaped the Cobalt Price Landscape in 2025

The cobalt price story of 2025 is fundamentally a tale of supply-side intervention. What began as a severe oversupply crisis transformed into a market staring down potential deficits — all because of one country’s export policies.

The Dramatic Cobalt Price Turnaround

When 2025 kicked off, cobalt prices had hit their weakest point in nearly a decade, trading at just US$24,343.40 per metric ton. By year-end, they had more than doubled to US$53,005. This wasn’t driven by surging EV demand. It was driven by the Democratic Republic of Congo (DRC) taking control of its cobalt supply.

“Prices recovered sharply following the DRC banning cobalt exports in February,” explained Benchmark Intelligence analyst Roman Aubry. By December, the numbers told the full story: cobalt metal climbed 130 percent year-to-date, while hydroxide surged 328 percent and sulphate jumped 266 percent.

February’s Game-Changer: DRC Export Ban

The real turning point came in late February when the DRC — which controls roughly three-quarters of global cobalt output — imposed a four-month suspension on hydroxide exports. The market responded immediately. Cobalt prices jumped from US$24,495 at January’s start to above US$34,000 by March, with intra-month peaks touching US$36,300.

This suspension marked the industry’s first meaningful rebound in nearly two years. Global mine production had doubled over five years, far exceeding demand growth from electric vehicles and other sectors. The DRC’s intervention flipped the script entirely.

Indonesia Steps Into the Spotlight

As the DRC tightened its grip on supply, Indonesia emerged as the secondary source. The world’s second-largest cobalt producer generates most of its cobalt as a byproduct of its nickel industry through high-pressure acid leaching (HPAL) plants. These facilities produce mixed hydroxide precipitate (MHP) — an intermediate containing both nickel and cobalt — that can be refined into battery-grade materials.

Indonesia produced roughly 31,000 metric tons of cobalt in 2024, about 10 percent of global supply. With HPAL projects potentially scaling to 50,000 metric tons per annum of cobalt, Indonesian MHP became an increasingly attractive substitute for DRC hydroxide, especially among Chinese refiners looking for alternatives.

Mid-Year Stabilization: A New Equilibrium Forms

Through Q2 and Q3, prices stabilized in a band between US$33,000 and US$37,000 per metric ton. Chinese refiners drew from existing stockpiles while trade flows continued, particularly from Indonesia.

When the DRC extended its export restrictions through September in mid-year, market sentiment shifted. Analysts stopped viewing this as temporary disruption and started treating it as structural change. Chinese import data confirmed the impact — hydroxide inflows had collapsed, and refinery feed was expected to remain constrained into late 2025 or early 2026.

The cobalt market had transformed from one of chronic oversupply to approaching equilibrium — not because demand surged, but because supply was deliberately restricted.

October’s Structural Reset: Quota System Replaces Ban

In mid-October, the DRC lifted its blanket ban and replaced it with a rigid quota system designed to operate through 2026. Annual DRC exports are now capped at approximately 96,600 metric tons — roughly half of 2024 levels — with only 18,125 metric tons allocated for Q4 2025.

This structural tightening sent prices soaring above US$47,000 by late October, the highest level since early 2023. Major producers like CMOC Group received significant quota allocations, but inventories outside the DRC remained tight. Market participants anticipate continued upward pressure as long as quota systems limit supply.

“Prices are considerably higher than the year’s start and likely to remain elevated as long as current quota levels persist,” wrote Fastmarkets analyst Oliver Masson. “The longer prices stay elevated, the more likely EV manufacturers shift to low-cobalt or cobalt-free battery chemistries, potentially slowing demand growth.”

2026 Outlook: Entering Structural Deficit Territory

Looking ahead, analysts project a structural shortfall of roughly 10,700 metric tons against demand near 292,300 metric tons. Fastmarkets forecasts cobalt could average around US$55,000 in 2026 as export quotas maintain pressure.

Indonesian supply will climb, but most analysts agree it won’t be enough to offset DRC constraints in the near term. The cobalt price environment is shifting from one defined by gluts and volatility to one characterized by managed scarcity and sustained elevation.

The critical risk: as ex-DRC stocks dwindle, demand destruction from switching to alternative battery chemistries could reshape the entire industry landscape.