SunSirs: With Supply Declining and the Rebound in Demand Falling Short of Expectations, Cobalt Prices Are Likely to Rise Than Fall in the Near Term

In May, cobalt prices fluctuated at high levels with an upward bias

According to the SunSirs Commodity Cobalt Market Analysis System: On May 29, the price of cobalt stood at 424,000 RMB/ton. This represents a 0.40% increase compared to the price of 422,300 RMB/ton recorded on May 1, reflecting a period of high-level, volatile consolidation. Throughout May 2026, the cobalt market trended upward before retreating; overall, the market remained strong while fluctuating at elevated levels, with a median price of approximately 425,000 RMB/ton.

Overseas Markets: MB cobalt prices saw a slight increase in May

As indicated by the MB cobalt price chart, cobalt prices halted their decline and rebounded in May, with MB prices trending upward amidst slight fluctuations. The rise in international cobalt prices serves as a positive catalyst for the domestic cobalt market.

Supply Side: Raw Material Shortages, Declining Output, Depleted Inventories

In mid-March, the Democratic Republic of the Congo (DRC) effectively suspended cobalt exports following concerns raised by officials regarding inconsistencies in assay results for cobalt hydroxide. Export clearance for cobalt hydroxide came to a complete standstill, resulting in major industry players—such as Glencore and CMOC—receiving virtually no shipments in May.

Huayou Cobalt announced that its subsidiary, Huafie Nickel & Cobalt, temporarily suspended operations on certain production lines for maintenance effective May 1. This decision was prompted by a sharp surge in sulfur prices and the high-load operation of its production facilities; the suspension is expected to impact approximately 50% of the subsidiary's output. Consequently, Indonesia's production of MHP (Mixed Hydroxide Precipitate) declined in May, leading to a reduction in the supply of Indonesian cobalt during the month.

In May, the operating rates for domestic smelting enterprises stood at 40% for leading firms and 20–30% for small and medium-sized enterprises; the primary cause was a disruption in raw material supplies.

Domestic social inventories (comprising electrolytic cobalt and cobalt salts) totaled approximately 8,000 to 10,000 tonnes of metal cobalt—a year-on-year decline of 60%. Port inventories stood at roughly 2,000 tonnes, having been nearly depleted. Due to the scarcity of raw materials and a reluctance to stockpile finished products, inventories at smelting plants hovered between 3,000 and 4,000 tonnes. Overall inventory levels are currently at a historical low, sufficient to cover only 8 to 10 days of essential demand.

Demand Side: While demand has shown signs of warming, overall growth falls short of expectations.

Data released by the China Automotive Battery Innovation Alliance indicates the following regarding production output: In April, my country's combined output of power and energy storage batteries totaled 183.9 GWh—a month-on-month increase of 3.5% and a year-on-year increase of 55.6%. Of this total, the output of ternary batteries reached 31.6 GWh, accounting for 17.2% of the total output; this represented a month-on-month increase of 0.8% and a year-on-year increase of 34.4%. For the period from January to April, my country's cumulative output of power and energy storage batteries reached 671.3 GWh, marking a cumulative year-on-year increase of 51.0%. Within this cumulative total, ternary battery output amounted to 121.0 GWh, accounting for 18.0% of the total output and representing a cumulative year-on-year increase of 38.8%. The growth in ternary battery output has been sluggish, and its share of the overall power and energy storage battery market has experienced a noticeable decline. Consequently, expectations regarding demand growth in the cobalt market have been lowered.

According to forecast data from the CPCA (China Passenger Car Association), domestic retail sales of new energy passenger vehicles are expected to reach 950,000 units in May—a month-on-month increase of 12.0% compared to April. However, retail data from the first four weeks of the month (May 1–24) shows that sales of 619,000 units still represent an 11% decline year-on-year. While the full-month forecast indicates a warming trend in the market, the outlook for overall demand growth remains limited. Furthermore, several brands announced price hikes or tightened retail incentives in May; these rising prices are bound to impact the growth of new energy passenger vehicle sales, thereby constraining the growth of essential demand within the cobalt market.

Overall, the demand side of the cobalt market experienced a rebound in May, with essential downstream demand recovering slowly. However, relative to demand expectations, this growth has been quite sluggish, offering only limited support for an uptick in cobalt prices.

Market Overview and Outlook

According to data analysts at SunSirs, delays in shipments arriving from the Democratic Republic of the Congo (DRC) have resulted in an extreme scarcity of tradable spot inventory; consequently, traders are maintaining firm price quotes and are reluctant to sell. Downstream buyers are placing small, demand-driven orders; while apprehensive about high prices, they dare not risk a complete disruption to their supply chains. Given the low inventory levels and the persistence of essential downstream demand, the supply-demand gap is unlikely to be resolved in the near term, suggesting that current market conditions will persist. Looking ahead, the cobalt market is expected to experience high-level volatility with an upward shift in its price center, making cobalt prices more prone to rising than falling.

SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.