Smelters scramble for cobalt after the Democratic Republic of Congo tightened exports of mined cobalt hydroxide, the feedstock for battery‑grade metal. The clampdown has pushed cobalt hydroxide prices to match refined cobalt, a level unseen since 2019, and sent smelters into a search for substitutes for global markets.

China’s largest importers, where most cobalt leaves the Congo, pivot to shredded batteries, or “black mass,” and recycled cobalt metal that can be dissolved and reprocessed. Tony Southgate of Stratton Metals notes that stockpiles worldwide are eroding, forcing smelters to pay “levels that don’t make financial sense” for global buyers.

Alternatives like mixed hydroxide precipitate (MHP) face their own hurdles. Production of MHP is expected to drop this year because the Iran war has cut global supplies of sulfuric acid, the key chemical. As a result, MHP availability has slipped, pushing smelters back toward recycling for cobalt feeds in 2025.

With cobalt supply tightening, battery makers face a push to ditch cobalt from nickel‑manganese‑cobalt cells. Morgan Stanley analysts report that lithium‑iron‑phosphate batteries are gaining market share thanks to lower costs and reduced exposure to cobalt and nickel. Investors now eye supply diversification and cost control for electric vehicle markets in 2025.