Market Adjustment and Industry Response
Between October 1 and 3, 2025, Chinese cobalt refiners began restructuring procurement and processing operations in anticipation of the Democratic Republic of the Congo’s new cobalt export quotas, set to take effect on October 16. With the DRC capping exports at 96,600 metric tons per year for 2026–2027, Chinese buyers—the dominant global consumers of cobalt—are pivoting toward
metal dissolution and recycling processes to offset reduced concentrate imports. Industry sources in Shanghai and Zhejiang reported that refiners are increasingly converting stored cobalt metal and scrap into sulfate and hydroxide, key inputs for battery precursor manufacturing.
Price Reaction and Supply Chain Implications
The policy-driven supply squeeze triggered an immediate price rally across Asian markets, with battery- grade cobalt prices rising over 8% in early October trading. Spot demand for intermediate cobalt compounds surged as producers sought to secure feedstock before DRC export controls begin. Analysts note that this adjustment reflects a structural shift in the global cobalt market, where **Chinese processors—responsible for more than 75% of refining capacity—**must balance domestic inventory management with strategic diversification of supply sources. Some refiners have already begun negotiating new sourcing contracts with suppliers in Indonesia, Morocco, and Australia, though logistical and quality constraints limit short-term substitution.
Outlook for Global Battery and EV Supply Chains
The shift underscores China’s central role in stabilizing the cobalt supply chain amid increasing geopolitical and regulatory pressures. By leveraging recycling capacity and refining flexibility, Chinese firms aim to sustain EV battery production growth while mitigating exposure to African export risks. However, sustained high prices and quota-related uncertainty could elevate battery material costs globally, potentially affecting electric vehicle affordability and margins. Market observers expect continued volatility through early 2026 as traders, refiners, and automakers recalibrate to a new landscape defined by restricted DRC output, tighter Chinese inventories, and heightened competition for ethically sourced cobalt.