Minmetals Securities recently released its Nonferrous Monthly Tracking Report: The Democratic Republic of Congo's quota system has effectively locked in global cobalt raw material supply, projected to plummet to 200,000 metric tons. Combined with estimated recycling volumes, global cobalt element supply is forecast at 206,000 metric tons in 2025, rising to 214,000 and 216,000 metric tons in 2026 and 2027 respectively. Global cobalt consumption continues to grow at a steady pace. Based on historical growth rates, global consumption is projected to reach 221,000 and 231,000 metric tons in 2026 and 2027 respectively, indicating a looming supply shortage.

The DRC's quota system has been implemented, with annual exports capped below 100,000 metric tons. On October 10, the Democratic Republic of the Congo introduced a new quota management system and allocation plan to replace its previous cobalt export ban. For 2026 and 2027, annual exports are set at 96,600 metric tons each year, comprising 87,000 metric tons of base quotas and 9,600 metric tons of ARECOMS strategic quotas. Major mining companies like Luoyang Molybdenum, Glencore, and Eurasian Resources Group secured primary quotas, while local cobalt smelters received no direct allocations.

With supply and demand facing a rigid shortage, prices may reach new heights. The DRC's quota system has effectively locked in global cobalt raw material supply, projected to sharply decline to 200,000 tons. Combined with estimated recycled volumes, global cobalt element supply is forecast at 206,000 tons in 2025, rising to 214,000 and 216,000 tons in 2026 and 2027 respectively. Global cobalt consumption continues to grow at a steady pace. Based on historical growth rates, we project global consumption to reach 221,000 and 231,000 metric tons in 2026 and 2027 respectively, indicating a persistent supply shortage.

China's full-industry-chain inventories continue to deplete, with regions outside the DRC remaining in a destocking cycle over the next two years. Taking cobalt chloride as an example, China's inventory days have decreased from 46 days in April to the current 39 days. Downstream smelters have experienced the most significant depletion of intermediate product inventories, falling from 45,000 metric tons in May to the current 17,000 metric tons—a destocking volume of 28,000 metric tons over five months. Combined, the five-month depletion of intermediate stockpiles at integrated smelters, social inventories of electrolytic cobalt, and cobalt sulfate inventories totaled 32,000 metric tons, averaging 6,400 metric tons per month.

Short-term cobalt product price inversion signals cobalt prices will reach new heights. With cobalt product price inversion, electrolytic cobalt becomes economically viable. Since the Democratic Republic of Congo first proposed banning cobalt ore exports in 2025, the average CIF China price for cobalt intermediates has risen steadily from $5.95/lb to the current $24.15/lb, a 306% increase. Current Chinese cobalt product prices are: electrolytic cobalt at CNY 402,000/ton, cobalt sulfate (metal equivalent) at CNY 432,000/ton, and cobalt tetroxide (metal equivalent) at CNY 474,000/ton. Electrolytic cobalt's price increase has lagged significantly behind other products, even creating a price differential where purchasing electrolytic cobalt for reverse leaching becomes economically viable. As cobalt raw material inventories deplete, we believe electrolytic cobalt prices still have room to catch up and narrow this spread.

U.S. Resumes Electrolytic Cobalt Reserves. The U.S. Department of Defense is set to relaunch a $500 million cobalt procurement tender—the first large-scale U.S. cobalt purchase since the Cold War. On November 24 local time, the DoD announced it would reissue an adjusted tender notice, with award expected in early February 2026. This initiative began in August but was canceled in mid-October due to “significant issues with the statement of work,” reigniting the cobalt stockpile competition.

Overall, cobalt prices are poised to reach new heights.

As an integrated internet platform providing benchmark prices, On December 2, the benchmark price of cobalt on SunSirs was 409,200.00 RMB/ton, an increase of 1.04% compared with the beginning of the month (405,000.00 RMB/ton).

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