London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

China’s demand for electric cars drives cobalt prices to two-year high

China’s demand for electric cars drives cobalt prices to two-year high

The metal is largely mined in the Democratic Republic of Congo and Chinese companies are investing heavily there.

Cobalt prices have soared by about a quarter since the start of the year, driven by the push for electric cars in China and the European Union, as well as Chinese stockpiling, analysts said.

On Tuesday, a tonne of cobalt was selling on the London Metal Exchange for US$40,000 – its highest level in two years. The metal is largely mined in the Democratic Republic of Congo (DRC) and shipped via South African ports to international markets.

It has become a strategic metal because of its use in lithium-ion batteries for electric cars and mobile phones, as well as for making alloys for jet turbine blades.


Raw cobalt after its first transformation at a plant in the Democratic Republic of Congo before it is exported to China for refining.


Chris Berry, president of New York-based commodities advisory firm House Mountain Partners, said robust electric car sales in China and the EU were behind the price rise.

When Covid-19 had brought much of the global economy to a screeching halt in 2020, the cobalt market was not spared, but as economies slowly reopened, electric car sales had handily outpaced those with internal combustion engines, and this was underpinning cobalt demand, he said.

According to Caspar Rawles, head of price assessments at London-based Benchmark Mineral Intelligence, electric vehicle (EV) sales had been weak in the first half of 2020, because of the coronavirus, but surging demand in the second half saw total year-on-year sales increase by 10.9 per cent on 2019.

Rawles said generous subsidy policies from European governments for the EV sector had contributed to the surprisingly strong electric car sales. Another factor in surging cobalt demand had been the boost in consumption of consumer electronics linked to home working, he added.

Rising demand for the metal compounded in late 2020 when the Chinese State Reserve Bureau announced another round of cobalt buying, according to Rawles. The pandemic had also tightened supply, with some operations in the DRC halted because of Covid-19 restrictions.

Refining of the metal in China – where more than 80 per cent of cobalt battery chemicals are produced – was also affected when coronavirus quarantine measures were imposed in the first four months of last year.

And there were logistical nightmares after the weeks-long closure of Durban port, from where most of the cobalt raw materials from the DRC are shipped.

Rawles said Benchmark was forecasting the market to fall into a slight deficit in 2021, which would grow over the coming years. “We see the cobalt market falling into a slight deficit, with supply at 147,000 tonnes and demand rising to 148,000 – but by 2025 this deficit widens, with supply at 211,000 and demand at 238,000 tonnes,” he said.

“This deficit is likely to bring about higher prices, which will incentivise new production, but the question is how quickly this new supply can be brought to market since typically this takes more than seven years, so too slow to react to imminent demand increase from the battery sector.”

China plays a significant role in the cobalt supply chain and has strategically positioned itself in its production and refining. Chinese companies have invested heavily in the DRC and the Central African nation is expected to continue being at the centre of cobalt supply for years to come.

Last year, 75 per cent of the world’s cobalt was produced in the DRC, and that dominance is expected to grow in the near term as major supply expansions are focused there too.

“While there are some growing key regions for cobalt production, with new projects being developed in Indonesia, Australia and Canada among others, we expect the DRC to remain the dominant source of cobalt for the foreseeable future,” Rawles said.

Berry said there were decades’ worth of reserves and resources in the DRC and when coupled with high copper prices it was economically very attractive to produce cobalt as a by-product of copper mining.

“While there are cobalt resources in Canada and Australia, for example, they lack the scale needed to compete with the DRC,” he said.

“I would think that the percentage of cobalt refined in the country would remain steady going forward.”

As EV sales continued to ramp up, with China expected to account for at least 50 per cent of the market going forward, Berry said cobalt use in lithium-ion batteries could double by 2025.

“It’s a tough call to make beyond 2025, as that is the point in time when I think EV sales could take hold. I expect to see some real innovation in battery chemistry by then, but the cobalt market will remain tight and prone to shocks due to the geopolitical reputation of the metal and its importance in battery technology and the wider economy,” he said.

Rawles said that although there was little domestic production, China had a stake in a large percentage of overseas mining operations and was moving to acquire more.

Chinese companies were very active in the DRC, he said, pointing to China Molybdenum’s recent purchase of the as yet undeveloped Kisanfu resource for US$550 million from Freeport McMoRan. The Chinese company already owns Tenke, the world’s second-largest cobalt mine, also in the DRC.

Some of the other Chinese companies operating in the DRC include Huayou Cobalt, Chengtun Mining, Wanbao and CNMC.

In Indonesia, which is looking to become a new battery raw material hub, particularly focused around nickel and cobalt, most companies developing such operations are Chinese, Rawles said.

Besides raw material production, Rawles said China was even more dominant, with about 65 per cent of the world’s cobalt in all forms refined in China, and around 85 per cent of the world’s cobalt chemicals – many of which are used in the battery supply chain – produced there.

“So, China has a big stake in the cobalt supply chain currently, and this is something we are expecting to grow in the coming years,” he said.

Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×