Cobalt Market Set to Shift from Surplus to Shortage as EV Demand Surges

The global cobalt market is expected to move from a surplus in 2024 to a supply shortage by the early 2030s. This change is driven mainly by the rapid growth of electric vehicles (EVs), according to a new report from the Cobalt Institute.

Cobalt in 2024: A Surplus Situation

In 2024, the cobalt market had a surplus of 36,000 metric tons. This was about 15% more than the total global demand. In 2023, the surplus was smaller at 25,000 tons. The extra supply in 2024 pushed prices down to a nine-year low before bouncing back.

In response to falling prices, the Democratic Republic of Congo (DRC), the world’s top cobalt producer, made a bold move. In February 2024, the DRC announced a four-month export ban to help reduce the oversupply. The result was immediate—cobalt prices surged by 60%, reaching $16 per pound.

Demand Growing Faster Than Supply

While global cobalt supply is expected to grow by around 5% each year, demand is expected to grow even faster—around 7% each year. This means that by the early 2030s, the market could face a shortage instead of a surplus.

Electric vehicles are a big reason for this change. In 2024, EVs used about 43% of the world’s cobalt supply. By 2030, that number is expected to rise to 57%. This growing demand puts pressure on producers to keep up.

Other industries, such as mobile phones and laptops, will also need more cobalt. However, the increase will be much smaller compared to the EV sector.

Shifting Sources of Cobalt Supply

Right now, the Democratic Republic of Congo dominates the cobalt supply. In 2023, the country produced about 76% of the world’s cobalt. But this dominance is expected to weaken. By 2030, the DRC’s share could drop to 65%.

At the same time, Indonesia is becoming a key player. In 2024, Indonesia is expected to produce 12% of the world’s cobalt. By 2030, that number could grow to 22%. This change could balance the market and reduce dependence on a single country.

According to the Cobalt Institute, this shift in supply sources is important for the long-term health of the cobalt market.

What This Means for Investors

For investors, these trends signal big changes. The growing demand for cobalt, especially from the EV industry, means prices could continue to rise. Companies that depend on cobalt may need to adjust their plans and secure stable supply chains.

Many electric car makers are already looking for new suppliers. Some are even investing in mining projects to make sure they have enough materials in the future.

Environmental and Policy Impacts

The rise in cobalt demand also reflects larger global goals. Many countries are pushing for cleaner energy and greener transportation. Cobalt is a key part of lithium-ion batteries, which power electric cars.

Governments around the world are offering incentives for EVs. They are also setting rules to reduce carbon emissions. These policies are expected to drive more people to switch to electric vehicles, further increasing the need for cobalt.

Challenges Ahead

Even though demand is growing, there are still some big challenges. Mining cobalt can be harmful to the environment. There are also human rights concerns, especially in countries like the DRC, where mining conditions are often poor.

Some companies are trying to solve this by recycling used batteries. Others are working on new battery types that use less cobalt or none at all. However, these solutions will take time to develop and scale.

In the short term, the world will still need a lot of cobalt to support the clean energy shift.

The Global Market Outlook

Cobalt’s future is closely tied to the success of electric vehicles and the green energy movement. As EV sales continue to rise, the need for cobalt will follow. Countries like Indonesia are ready to step up production, while traditional leaders like the DRC may face pressure to improve supply reliability.

The transition from a surplus to a shortage marks a major turning point in the cobalt industry. It highlights the importance of planning ahead—for companies, investors, and governments alike.