Cobalt Supply Concentration: The Impact on Commodity Pricing
- 7 days ago
- 4 min read
Updated: 25 minutes ago
Executive Summary
Global cobalt prices have risen sharply due to constrained supply and upstream stockpiling, reflecting structural control issues rather than demand-driven scarcity.
Although the Democratic Republic of Congo dominates cobalt production, control over refining, offtake, and inventory is concentrated downstream, largely under Chinese firms.
U.S. policy responses such as strategic stockpiling and reshoring are necessary but insufficient, as they address availability and capacity without resolving upstream control and visibility gaps.
Achieving true supply resilience will require multi-tier transparency into critical mineral supply chains to identify ownership concentration, dependency risk, pricing and regulatory exposure.
Cobalt prices in the United States and global benchmark markets have risen sharply in recent months. Cobalt prices more than doubled through 2025, reaching levels above $55,000 per metric ton. This reflects tightening availability rather than a sudden surge in demand. Analysts attribute this escalation to constrained exports and stockpiling behavior tied to upstream supply concentration, particularly in the Democratic Republic of Congo.
U.S. industrial and policy leaders now agree: access to critical minerals is no longer just a downstream procurement issue. It is a matter of industrial resilience and national security. The Wall Street Journal reported on the administration's plan to establish a $12 billion strategic stockpile of critical minerals, including cobalt. This initiative counters China's dominance in mineral processing. It recognizes that reliance on concentrated foreign supply chains constitutes a structural vulnerability.
This policy signals a reframing of cobalt as a strategic asset. Availability, ownership, and control now have direct implications for economic security.
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Why Cobalt Has Become a Strategic Risk
Cobalt is a vital input for lithium-ion batteries in electric vehicles, grid-scale energy storage, aerospace systems, and defense applications. Demand is expected to grow several-fold by 2030. Supply remains structurally constrained. The U.S. Geological Survey estimates approximately 70% of global cobalt production originates in the Democratic Republic of Congo. While this concentration introduces political risk, production geography alone does not explain recent price behavior.
Control extends beyond extraction. Mining is only the first stage in a value chain involving refining, processing, logistics, and long-term offtake agreements. Analyses from the Center for Strategic and International Studies show Chinese firms hold ownership stakes or operational control across a majority of large-scale Congolese cobalt mines.
China's leverage is most pronounced downstream. The country controls an estimated 65–75% of global cobalt refining capacity. This enables influence over battery-grade material required by automakers and energy-storage manufacturers. Cobalt mined outside China is often processed within Chinese-controlled facilities before entering global markets. This structure enables inventory accumulation and strategic stockpiling without explicit export bans.
Market data show intermediate cobalt feedstock prices more than quadrupled during 2025. Refined cobalt prices more than doubled. This indicates constrained supply rather than demand-driven scarcity, resulting in heightened price volatility and reduced spot-market liquidity.
Cobalt Supply: Upstream Opacity in Stockpiling & Reshoring
Establishing a strategic cobalt stockpile is a necessary response. By securing physical supply, policymakers aim to mitigate short-term disruption risk. Yet stockpiling primarily addresses availability. It does not clarify provenance, ownership, or dependency on foreign-controlled networks for future replenishment. Without visibility, strategic reserves risk formalizing existing dependencies.
This limitation becomes pronounced as domestic industrial activity accelerates. Federal incentives are driving renewed investment in U.S.-based manufacturing across energy, transportation, and infrastructure sectors. While strengthening downstream capacity, this amplifies demand for critical minerals and increases exposure to upstream constraints.
U.S. electricity consumption is projected to increase by approximately 25% between 2023 and 2030. This intensifies demand for grid equipment, energy storage, and power-generation systems relying on cobalt-containing components.
Siemens Energy's $1 billion investment in expanding U.S. manufacturing of electrical-grid equipment is instructive here. Expanding turbine, transformer, and switchgear production underscores the scale of industrial re-localization. It also highlights a structural mismatch. Final manufacturing is increasingly domestic, but upstream material supply remains globally dispersed and unevenly controlled.
Cobalt passes through multiple intermediaries between extraction and end use. According to the OECD, fewer than 20% of companies sourcing critical minerals have visibility beyond their tier-one suppliers. Policy and industrial strategies are vulnerable to informational blind spots embedded deep within supply chains.
Why Transparency Is the Missing Control Layer
Current U.S. strategy relies on stockpiling and reshoring. Both are necessary but neither provides control. Stockpiling mitigates short-term availability risk. Reshoring secures downstream manufacturing capacity. Neither addresses who controls upstream supply.
Effective risk management requires visibility across multiple tiers. Transparency enables decision-makers to distinguish between geographic origin and economic control, apparent supplier diversity and actual concentration.
In the cobalt market, this distinction is decisive. Extraction is geographically concentrated in Congo, yet refining and offtake arrangements are dominated by Chinese firms. Without visibility into these structures, governments and manufacturers cannot accurately assess exposure. As regulatory scrutiny increases through due-diligence requirements, opacity itself becomes a material risk.
How Sustain360°™ Enables Supply Chain Control
Addressing upstream opacity requires granular intelligence on how materials move through complex, multi-tier networks. Sustain360°™ provides this capability by mapping critical mineral supply chains across multiple tiers.
We link material flows to ownership structures, geographic risk, and processing dependencies. For cobalt, this allows organizations to identify where material is mined, where it is refined, who controls those assets, and how concentrated supply relationships truly are.
This insight supports informed sourcing decisions, participation in stockpiling initiatives, reshoring strategies aligned with upstream reality, and risk mitigation across compliance, reputational, and geopolitical dimensions.
Audit Your Supply Chain Exposure Ahead of 2030
Cobalt demand is accelerating while supply control remains highly concentrated. In a brief discovery session, we help organizations surface critical mineral dependencies, uncover upstream visibility gaps, and assess readiness for emerging regulatory and operational risk.