Cobalt prices could see further gains as geopolitical factors and supply restrictions tighten availability of the battery metal, UBS mining analysts say.
The US Defense Logistics Agency is seeking to purchase up to 7,500 tonnes of cobalt over the next five years, its first acquisition programme since the 1990s.
The contract, worth up to $500 million, highlights efforts to reduce reliance on China, which dominates cobalt processing and has built its own strategic reserves.
Suppliers approached include Vale SA (ADR) (NYSE:VALE), Sumitomo Metal Mining and Glencore PLC's (LSE:GLEN) Nikkelverk plant in Norway.
At the same time, the Democratic Republic of Congo, which accounts for around 77% of global supply, has extended an export ban on cobalt until at least 21 September.
UBS expects a quota system to follow, with tighter restrictions limiting flows into the global market even if shipments resume.
Inventories remain high in the DRC, but the bank noted it could take until early 2026 for any material to reach China, providing near-term support for prices.
Cobalt metal prices have risen from around $10 per pound in February to about $16 per pound in March, stabilising since, while cobalt hydroxide payables have climbed from 60% to 87%.
UBS said the combination of US stockpiling and DRC controls should help sustain prices into the fourth quarter.
On producers, the bank highlighted Glencore and CMOC as key players, with Glencore preferred due to its diversified portfolio, despite CMOC’s status as the largest cobalt producer with a 35% market share.