Background:
Based on recent industry trends, the influence of cobalt on lithium-ion batteries primarily revolves around three key aspects: supply-demand dynamics, technological applications, and price fluctuations. Below is a summary of the critical information:
1. Supply-Demand Dynamics and Price Fluctuations
Short-term price correction: In early November 2025, cobalt prices experienced a temporary decline, with the average price of 1# cobalt in the Yangtze River spot market dropping to 396,000 yuan per ton, a decrease of 2,000 yuan from the previous day. This adjustment was mainly driven by increased supply of recycled cobalt (boosted by policies like "one pool, one code") and inventory digestion by battery manufacturers.
Long-term supply tightness: The Democratic Republic of the Congo (DRC), which accounts for 76% of global cobalt production, continues to tighten its export quotas. The 2026 quota is expected to be only 44% of the actual export volume in 2024. Coupled with the global cobalt market experiencing consecutive years of supply deficits, medium- to long-term supply pressures remain significant.
2. Technological Applications and Industry Evolution
Critical role in performance: Cobalt contributes approximately 30% of the capacity in NCM ternary materials through the Co³⁺/Co⁴⁺ redox reaction and suppresses nickel ion migration to enhance structural stability. For example, NCM622 (with 20% cobalt) exhibits a cycle capacity retention rate of 92%, significantly higher than NCM811 (85%).
Cobalt reduction advancements: Companies are optimizing materials (e.g., lithium aluminate coating, introducing Al³⁺) to reduce cobalt content to below 5%. However, high-energy-density batteries still rely on cobalt for stability, as seen in BYD's Blade Battery, which retains 5% cobalt in its NCM precursor.
3. Market Drivers and Challenges
Demand side: The new energy vehicle (NEV) sector (with record-high production and sales in September) and energy storage batteries (driven by improved IRR and increased tendering) continue to support cobalt demand. However, high-nickel, low-cobalt technologies may suppress long-term demand.
Resource constraints: The DRC holds 70% of global cobalt reserves, with artisanal mining accounting for 20% of supply. This raises environmental, ethical, and supply chain risks.
Conclusion
Cobalt prices are currently experiencing short-term volatility due to policy and inventory adjustments, but medium- to long-term supply deficits (estimated at 122,000 tons in 2025) and its irreplaceable role in technology will likely keep prices elevated. The industry is balancing resource constraints with performance needs through cobalt-reduction technologies. Future attention should focus on DRC policies and the implementation of recycling systems.