Cobalt Supply Chain, Market Dynamics, and Geopolitical Risks

Cobalt used to be something else entirely. Before it powered electric vehicles before it became the engine of today’s Green push it was the color behind Chinese porcelain, staining Tang and Ming dynasty ceramics blue. That's where the element sits now. In the cathodes of rechargeable batteries. The stuff that powers the EVs India, China, Europe, and the United States are all throwing energy futures into.

Globally, demand for cobalt exploded in 2024. We’re talking over two hundred thousand tonnes. And most of that growth? It came from batteries and electric vehicles. Sixty-one percent of market growth there.

But where does it come from? That's the sticking point. The Democratic Republic of Congo holds roughly three-quarters of all global supply. And then, in early 2025, Kinshasa finally shut the tap.

They imposed an export ban on cobalt hydroxide back in February. Then they switched to strict quotas. Years of low prices and a massive market glut meant that resource was just sitting there, chronically undervalued for the country.

The intervention worked, at least in price terms. Cobalt metal prices more than doubled by year-end. It shot up from near nine-year lows only $21,502 per tonne to $48,570 by October. The Cobalt Institute noted a 130 percent rise in refined metal prices over that same period. Hydroxide prices? Quadrupled.

The squeeze has since hit a level you just don't see anymore. Fastmarkets reports show the price smelters pay for cobalt hydroxide is now matching the actual price of the cobalt metal they pull out of it. This dynamic started back in March, and it’s never happened before in the data going all the way back to 2019.

It means the raw material now costs as much as the finished product. Tony Southgate, a trader at Stratton Metals, put it plainly when talking to the Financial Times. He said what this looks like on the ground: "The prices smelters were paying for feedstock had gone to levels that don’t really make financial sense. They just need the units."

China faces real headaches with all this now. It's the world's biggest EV market, and they dominate battery manufacturing. They have to keep hitting those huge production targets while dealing with these new constraints.

So what are they doing? Chinese refiners, who process most of that Congolese hydroxide, are pivoting. They’re turning to shredded batteries the black mass. And recycled cobalt metal is another option. There's this other thing too: a mixed hydroxide precipitate containing nickel and cobalt. Demand for that spiked sharply, but the supply side is now seriously compromised.

And then there’s production of Mixed Hydroxide Precipitate itself. That’s expected to drop this year. Why? The Iran war kicked off a global shortage of sulphuric acid needed to make it. Another exit just as smelters were already running into trouble.

Andries Gerbens, trading director at Darton Commodities, noted that demand for MHP picked up significantly. But now the availability is compromised. It’s pushing everyone toward recycling cobalt.

Jervois Global, which runs one of the biggest cobalt facilities outside China, admitted their profitability was "currently severely impacted" by all this market movement. Olivier Masson, a Fastmarkets expert on cobalt, said that prices across hydroxide, black mass, and other alternatives just aren't sustainable. He argued: "The numbers don’t add up," he told the FT.

India is in a tough spot under this whole situation. The DRC policy shift hits them particularly hard. Right now, India is 100 percent import dependent for lithium, cobalt, and nickel, according to an April briefing from the Institute for Energy Economics and Financial Analysis.

And they don't even have commercially viable reserves of these minerals themselves. That matters when you look at EV sales in India. They hit about 25 million units in FY2026. Electric cars nearly doubled their sales, and electric trucks jumped by two and a half times. Those trends now run straight into this tightening cobalt supply chain at every single step.

India’s imports are concentrated among just a few supplier countries. That magnifies the risk, even as they push for clean energy. The government launched the National Critical Mineral Mission in 2025. They allocated sixteen thousand three hundred crore rupees to secure supplies of minerals like cobalt. India and the DRC are supposed to sign an MoU soon about accessing these critical minerals, especially copper and cobalt.

They’re also looking further afield. India applied to the International Seabed Authority to explore that cobalt-rich Afanasy Nikitin Seamount in the central Indian Ocean. That's three thousand square kilometers over fifteen years. These bets might ease dependency eventually. But right now? The squeeze is happening now.