Prices of cobalt hydroxide, a key material for electric vehicle batteries, have surged in 2025 following export restrictions from the Democratic Republic of Congo, the world’s top cobalt producer.
Congo, which accounts for more than 70% of global cobalt production, estimated at over 280,000 metric tons this year, suspended all exports in February before introducing a quota system in October to boost state revenues and tighten oversight.
New conditions for exporters could complicate the quota system, likely worsening shortages and supporting higher cobalt hydroxide prices.
“Cobalt is currently registering as 2025’s top price performer, but this has purely been driven by the introduction of export quotas by Congo which have caused an artificial market tightness, removing 160,000 to 170,000 tons from the market this year,” analysts at Macquarie said.
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Cobalt hydroxide is produced in Congo and as a by-product of copper and nickel mining in Indonesia, the two primary global producers. Prices are calculated as a percentage of the underlying cobalt metal price, known as payables.
According to Reuters, sellers have been raising prices since Congo first suspended exports in February.
Payables for Congo’s hydroxide in top consumer China have jumped to 100% of the cobalt metal price, currently trading around $24 a lb ($52,900 a ton), up from nine-year lows near $10 a lb in February.
Some sources noted that exports might resume partially, but significant shipments needed by China’s EV battery makers are unlikely to arrive until February or March 2026.
Hydroxide produced in Indonesia has seen payables rise to 90% from 50% at the start of the year.
Three industry sources, speaking anonymously, said demand slowed in recent weeks and that high payables are sidelining buyers. Some sellers are even asking for premiums above the cobalt metal price.
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Image Credit: Reuters
