2025 Cobalt Market Trends: Oversupply and Shifting Battery Technologies Shape Industry Outlook
In 2025, the global cobalt market will continue to be shaped by two dominant trends: oversupply and shifts in battery chemistries. However, Prices -subdued by excess supply since 2023- are expected to remain stable, with limited volatility.
The rise of lithium iron phosphate (LFP) battery technology, particularly in China, continues to suppress demand for cobalt chemicals. Meanwhile, Indonesia’s rapid expansion in mixed hydroxide precipitate (MHP) production has introduced significant competition to the Democratic Republic of Congo’s (DRC) dominance in the cobalt market.
Overall, the future trajectory of the cobalt market will depend on economic conditions, trade dynamics, and technological advancements. Below are the key trends expected to impact cobalt prices in 2025:
Global Supply and Demand Trends
The International Energy Agency (IEA) projects that global cobalt demand will rise sharply from 213,000 metric tons in 2023 to 344,000 metric tons by 2030, reaching 454,000 metric tons by 2040. This growth underscores the critical need for cobalt in electric vehicle (EV) batteries and other applications. So, the IEA warns that the market could face a 16% supply shortfall by 2035. To meet this growing demand, over 17 new cobalt mines would need to be developed by 2030 to align with global net-zero carbon targets.
Despite the long-term demand outlook, oversupply remains a significant factor driving down prices. This trend, which began in 2023, is expected to persist through 2025. According to Fastmarkets, cobalt supply will exceed demand by approximately 21,000 metric tons in 2025, slightly down from 25,000 metric tons in 2024. The oversupply is primarily due to cobalt being a byproduct of copper and nickel mining. As production of these metals increases, cobalt surpluses are expected to worsen.
Although the market remains oversupplied, many countries have classified cobalt as a critical mineral and are working to strengthen domestic supply chains. Beyond its importance as a battery metal for the energy transition, cobalt’s production is highly concentrated. According to the IEA’s 2024 Global Critical Minerals Outlook, 84% of cobalt production comes from the DRC, making the market vulnerable to geopolitical risks.
The Rise of LFP Batteries
While demand for cobalt surges due to the growing EV and energy storage industries, changes in battery chemistries, such as the increasing use of LFP batteries, are threatening its long-term demand outlook, particularly in China.
Major EV manufacturers like Tesla and BYD have already adopted or announced plans to adopt LFP batteries for certain vehicle models. These batteries are widely used in mid-to-low-end EVs and offer significant cost and durability advantages, despite having lower energy density compared to nickel-cobalt-based batteries. For instance, Tesla’s standard-range Model 3 now uses LFP batteries, with plans to expand this chemistry to other models. This shift has substantially reduced demand for cobalt and nickel in battery production.
Trump 2.0 Is Here
The re-election of Donald Trump has introduced new uncertainties into the cobalt market, particularly for the electric vehicle sector. After taking office, President Trump signed a series of executive orders, including those aimed at rolling back electric vehicle incentives in favor of supporting the traditional automotive industry. This poses a significant challenge for cobalt demand, as the EV sector consumes roughly 40% of the world’s cobalt supply.
Additionally, there are concerns that Trump might impose stricter tariffs on cobalt and EVs originating from China. While Indonesia’s cobalt production currently remains exempt from U.S. trade measures, this exemption could change in the near term. Such developments could further disrupt global trade dynamics.
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