Cobalt Market Faces Deficit as DRC Export Curbs Tighten Supply

The global cobalt market is expected to move into deficit this year as export restrictions in the Democratic Republic of Congo, the world’s largest producer, tighten supplies of a metal critical to electric vehicle batteries, electronics and other technologies.

The International Energy Agency expects the market to shift into deficit from 2026, with the outlook increasingly shaped by supply policies in Congo and rising production in Indonesia, according to its Global Critical Minerals Outlook 2026.

Congo, which accounts for about two-thirds of global cobalt production, introduced an export ban in 2025 after years of oversupply and depressed prices. The restrictions were later replaced by a quota system that capped exports at 96,600 tonnes late in the year, less than half the country’s 2024 export volume.

The restrictions have sharply reduced trade in unrefined cobalt, particularly cobalt hydroxide, tightening supplies of intermediate feedstocks.

This created “supply tightness in intermediate feedstocks and contributed to upward pressure on prices,” the IEA said.

Cobalt metal prices approached $58,000 a tonne in the first quarter of 2026, more than three times their 2025 level. But refined cobalt inventories remained high, producing “differing price dynamics between intermediates and refined products”.

The market’s tightening comes as demand for cobalt continues to grow, particularly from batteries and electronics.

While the rapid adoption of lithium iron phosphate, or LFP, batteries is reducing the amount of cobalt required for electric vehicles, the IEA said changes in nickel-cobalt-manganese, or NCM, battery chemistries are partly offsetting that effect.

“However, this effect is partially offset by changes within nickel-cobalt-manganese (NCM) chemistries compared with previous expectations.”

More cobalt-intensive NCM batteries continue to hold a stronger share of premium electric vehicles in Europe and the United States.

“As a result, battery chemistry developments have a mixed impact on cobalt demand.”

Cobalt demand for EV batteries is expected to rise by nearly two-thirds between now and 2040 under the IEA’s Stated Policies Scenario, although the agency has revised its forecast lower from last year’s outlook because of changing battery chemistry choices.

Demand is also growing beyond electric vehicles. AI-enabled devices and wearables require higher energy density, supporting demand for lithium cobalt oxide cathodes, while smartphone replacement cycles have been stronger than previously expected.

Congo’s policy shift is having an outsized effect because of the country’s dominance of global cobalt mining.

The quota system, introduced by the Regulatory and Control Authority for Strategic Mineral Substances, or ARECOMS, in September 2025 and implemented the following month, was designed to support cobalt prices and encourage more processing within the country.

“Companies are excluded from the quota system if they exported less than 100 tonnes in 2024, operate refineries without mining activity or possess depleted cobalt reserves,” the IEA said.

ARECOMS was also given a strategic quota for projects considered to be of national importance, “with the right to buy back excess cobalt stocks and withdraw quotas from companies that process third-party or artisanal cobalt.”

The new system “increased supply uncertainty, with no clear allocation framework provided beyond 2027.”

Congo has also sought to attract investment and develop more of the cobalt value chain domestically. A strategic partnership agreement between the United States and Congo has resulted in early-stage deals aimed at increasing local value addition and diversifying ownership of supply.

The IEA said such initiatives “may help attract non-Chinese capital into the sector, they are unlikely to translate into significant new volumes in the near term.”

That leaves the global market with limited capacity to compensate for any sustained reduction in Congolese exports.

Indonesia is becoming an increasingly important source of cobalt, producing the metal as a by-product of its large nickel industry.

Its share of global cobalt production rose from about 1.5% in 2020 to approximately 15% in 2025, according to the IEA.

The growth gives battery manufacturers another source of supply, but Indonesia’s cobalt output remains closely tied to nickel production, limiting how quickly it can respond to changes in cobalt demand alone.

The combination of Congolese export restrictions and limited alternative supply means the market could remain constrained for years.

Supply in 2025 was sufficient to meet demand because the market still had a marginal surplus, helped by an extension of Congo’s 2025 export quotas into the first quarter of 2026. That extension allowed delayed shipments to be completed as the new quota system came into effect.

But the underlying market is tightening.

If existing Congolese export quotas remain in place, the IEA expects the cobalt market to move into deficit in 2026, with the imbalance potentially becoming a persistent feature of the market.

“This reflects the continued reliance on DRC supply, limiting the ability of the market to respond to growing demand despite expansion projects in other regions.”

Nkem Owoh (Nigeria)

Most Famous Movie: Osuofia in London (2003)

Short Bio: Nkem Owoh is a veteran Nigerian actor and comedian, widely regarded as one of Nollywood’s most influential and iconic figures. His role as Osuofia in the comedic film Osuofia in London brought him immense popularity across Africa.

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