Prices Surge Over 37%! Is "Grandma Cobalt" Making a Comeback?

Cobalt, a mineral resource once humorously nicknamed "Cobalt Granny," has once again demonstrated its critical role in the new energy industry through dramatic price fluctuations.

Industry data shows that as of March 7, the domestic average price of cobalt sulphate was 36,700 yuan/mt, up from 26,650 yuan/mt on February 25, marking a cumulative increase of over 37% in just a few days, with the highest surge nearing 50%. This sudden spike has sent shockwaves through the new energy industry.

Relevant information indicates that the primary driver of this round of cobalt salt price surges is the announcement by the world's largest cobalt supplier, the DRC, to suspend cobalt exports for four months starting February 22. This, coupled with reports of local tensions, has triggered a chain reaction in the market.

Looking back at 2022, cobalt sulphate prices once soared to a high of around 120,000 yuan/mt. However, as the production capacity of major global cobalt suppliers has continuously increased in recent years, the market has shifted from undersupply to oversupply, leading to a continuous decline in prices.

Reports suggest that the DRC's policy adjustment aims to address the prolonged cobalt price slump caused by oversupply in the international market, with plans to evaluate the policy's impact after three months.

Notably, the rising prices of cobalt sulphate and other cobalt salts have driven up the prices of some ternary cathode materials. Related companies are increasingly reluctant to sell, with some cathode material enterprises suspending quotations and orders or adjusting product pricing strategies to mitigate the risk of inventory devaluation (below market prices). This phenomenon has drawn significant attention from the industry.

The chain reaction poses a short-term test for the industry chain.

The price fluctuations of cobalt salts and cathode materials triggered by the DRC's cobalt export ban not only expose the risks of resource concentration but also serve as a stress test for the resilience of the industry chain.

Industry data shows that global cobalt production in 2024 grew by 21.8% YoY to 290,000 mt, with the DRC contributing 220,000 mt, accounting for a staggering 75.9%.

It is understood that transporting cobalt products from the DRC to China takes approximately 70-80 days. Therefore, the actual supply gap caused by the ban is expected to manifest several months later.

Nevertheless, the market has already exhibited "pricing based on expectations," with this expectation-driven price transmission causing more severe market volatility than the actual potential supply-demand mismatch.

Demand side, battery enterprises face rising cost pressures. Top-tier battery enterprises are relatively less affected, as they typically sign long-term contracts to lock in upstream raw materials and hedge against sharp price fluctuations. However, small and medium-sized enterprises may face certain challenges.

From the perspective of lithium battery technology routes, cobalt salts are primarily used in ternary batteries, potentially introducing uncertainties to future price changes of ternary batteries.

Meanwhile, with the continuous increase in global installations of LFP batteries led by Chinese enterprises, their market share is expanding, which may gradually mitigate the adverse effects of cobalt salt price hikes in the long term. Conversely, the impact on South Korean and Japanese battery enterprises, which primarily produce ternary batteries, could be more significant.

Long-term Supply Structure May Change

With reduced cobalt supply and rising prices, industry chain enterprises are taking corresponding measures to actively respond.

CMOC stated that its TFM and KFM mines (both located in the DRC) are currently maintaining normal production, while its nickel-cobalt hydrometallurgical project in Indonesia can provide alternative resources.

Huayou Cobalt also announced that the second phase of its Indonesian project, with an annual capacity of 50,000 mt of high-nickel ternary cathode precursor materials for power batteries, was fully completed on February 28 and is about to enter the ramp-up phase. This project aims to utilize Indonesian nickel-cobalt resources to fill the supply gap.

CNGR, on the other hand, has taken measures such as investing in Tengyuan Cobalt, pre-stocking refined cobalt, and using oxygen-enriched side-blowing technology to increase its self-supply ratio, thereby diversifying supply chain risks.

The industry generally believes that as the technology for extracting cobalt from Indonesian laterite nickel ore matures, it will provide a new pathway for diversifying raw material supplies in the new energy battery sector, helping to reduce dependence on the DRC and promoting regional restructuring of the cobalt supply chain.

Additionally, recycling companies like GEM are intensifying efforts in battery recycling and cobalt regeneration, which can partially alleviate the issue of temporary shortages in primary resources.

During the 2025 Two Sessions, several National People's Congress representatives proposed suggestions to enhance battery recycling efforts. As the closed-loop system of battery installation, usage, and recycling becomes increasingly complete, the recycling rate of rare and precious resources like cobalt will significantly improve, gradually reducing the industry's reliance on primary resources.

Driving Innovation in Battery and Material Technologies

Industry insiders suggest that under the current diversified technological layout, combined with significantly optimized resource regulation experience, the impact of the DRC's export ban will be somewhat mitigated. If the DRC's cobalt export restrictions become prolonged, it may also drive innovation in battery and material technologies.

The use of recycled cobalt not only helps reduce reliance on primary cobalt but also enhances resource utilization, aligning with the concept of sustainable development. With continuous advancements in related technologies, the proportion of recycled cobalt in cobalt supply is expected to increase.

For battery enterprises, this may accelerate their technological transition toward low-cobalt/no-cobalt battery technology routes. By focusing on low-cobalt/no-cobalt technologies and product layouts, many industry chain enterprises are actively seeking new performance balance points to reduce sensitivity to sharp fluctuations in cobalt salt prices.

This round of cobalt price fluctuations also serves as a reminder for industry participants to maintain sharper market insights and forward-looking strategic perspectives, stabilizing their positions amid short-term shocks and seizing new opportunities in long-term trends. By securing resources, optimizing supply, innovating technologies, and diversifying layouts, enterprises can continuously strengthen their market competitiveness, contributing to the steady and sustainable development of the new energy industry.