LME cobalt hit $56,290/t in March, up 67% year on year, as Electra Battery Materials opened Canada's first cobalt sulfate refinery and BASF ran its first black-mass recycling plant

Summary

LME Cobalt cash settled at $56,290 per metric tonne on March 31, 2026, a 67.48% year-on-year increase, as traders described the physical market as "the tightest ever" following the Democratic Republic of Congo's January 2026 cobalt hydroxide export quota, a draw-down of Chinese processor stocks accumulated over 2024-2025, and stronger NMC811 cathode demand from Korean battery makers. The price corrected in Q2 2026 as the DRC quota was partially eased, but remains approximately double the late-2024 trough. Electra Battery Materials commissioned Canada's first battery-grade cobalt sulfate refinery at Temiskaming Shores, Ontario in Q4 2026, with 5,120 tonnes per year of nameplate capacity and a five-year Glencore cobalt hydroxide supply agreement from Mutanda, DRC, qualifying the output for US IRA supply-chain provisions as a non-Chinese refinery. In Europe, BASF's Schwarzheide black mass processing plant, opened June 2025, began recovering cobalt, nickel and lithium from end-of-life EV batteries at 12,000 tonnes of black mass per year. Benchmark Mineral Intelligence documented LFP chemistry reaching 55% of global EV battery installations in 2025, but found absolute cobalt demand for batteries still grew approximately 8% as total EV production volumes expanded faster than the LFP displacement.

The split

The cobalt bull case (Fastmarkets, CRU) rests on the DRC dependency: the country produces roughly 70% of global cobalt, and the January 2026 export quota introduced a new political chokepoint analogous to China's rare earth export controls. A DRC export restriction has more immediate price impact than a Chinese rare earth quota, because cobalt processing outside DRC and China is minimal: Electra's 5,120 tpa Ontario refinery is a proof-of-concept against 150,000-plus tonnes of annual cobalt production. The bear case (Benchmark, Wood Mackenzie) notes that LFP's 55% battery share means cobalt's long-run demand growth rate is structurally slower than overall EV growth, and that the March price spike reflected a short-term physical squeeze rather than a fundamental supply deficit. Recycling is the structural swing factor: BASF Schwarzheide and Korea's battery recyclers (Li-Cycle, Umicore) are developing cobalt-recovery loops that, if scaled, could decouple Western battery production from new cobalt mining on a 10-15 year horizon. Electra's Glencore partnership makes the DRC-Canada-USA supply chain the closest non-Chinese cobalt refinery route to IRA compliance, but Mutanda's DRC political exposure is not eliminated by processing in Ontario.

By the numbers

• $56,290/t, LME cobalt cash price March 31, 2026 (67.48% year on year).
• ~55%, LFP share of global EV battery installations in 2025.
• ~8%, absolute growth in battery cobalt demand in 2025 despite LFP substitution.
• 5,120 tpa, Electra Battery Materials cobalt sulfate refinery nameplate (Ontario, Canada).
• C$73M, Canadian government financing for Electra (Natural Resources Canada).
• 12,000 tpa, BASF Schwarzheide black mass processing capacity (opened June 2025).
• ~70%, DRC's share of global cobalt mine production.
• January 2026, DRC cobalt hydroxide export quota effective date.

Why it matters

Cobalt entered 2026 at its lowest price since 2016 following two years of oversupply driven by artisanal and CMOC large-scale DRC production expansion. The Q1 spike demonstrates how quickly the market can tip: a DRC export quota, stock draw-downs and one quarter of stronger NMC demand converged to produce a 67% price move. For EV and battery manufacturers locked into NMC supply chains, the Q1 spike is a reminder that the DRC-China cobalt axis remains a single-point-of-failure in their supply chains. Electra Battery Materials' Ontario refinery is the first material attempt to create a non-Chinese cobalt sulfate refinery qualified for Western critical-mineral policy incentives: if it operates at nameplate and Glencore extends the supply agreement, it proves the model. BASF Schwarzheide, meanwhile, establishes that commercial black-mass cobalt recovery is technically feasible and economically viable at current cobalt prices, setting the stage for the recycling loop to play a larger role in the 2030s cobalt balance.

What to watch

• DRC cobalt hydroxide export quota: whether the January 2026 restriction is extended, tightened or removed, and how it interacts with CMOC and Glencore mine output.
• Electra Ontario ramp: whether 5,120 tpa is achieved in 2027 and whether the IRA supply-chain qualification holds under evolving Treasury guidance.
• BASF Schwarzheide expansion: whether the 12,000 tpa black mass capacity is doubled as European battery recycling volumes build.
• LFP vs NMC share in the 2027 model year: if NMC regains share in premium EV segments (800V platforms, solid-state transition), cobalt demand growth re-accelerates.
• DRC political stability: elections in late 2026 and the ongoing eastern DRC conflict are the primary risk factors for cobalt supply continuity.