Why Cobalt Prices Are Climbing  and What It Means for SmCo & AlNiCo Magnets

Supply constraints and export policy shocks have sent cobalt costs higher, a trend that’s rippling through the magnet alloy market. This analysis examines the key drivers behind cobalt’s surge, including the Democratic Republic of Congo’s new quota system, producer output cuts, and critical feedstock bottlenecks, while exploring the direct implications for SmCo and AlNiCo magnet manufacturers and buyers navigating this volatile landscape.

1. Export Restrictions from the DRC

The Democratic Republic of the Congo, responsible for roughly 70 % of mined cobalt, has shifted from an export halt to a quota‑based system in 2025. That has restricted available shipments and forced buyers to cover earlier, tightening the market. Spot and contract cobalt prices rose as buyers competed for fewer volumes.

2. Producer Output Cuts & Operational Constraints

Major players, including Glencore, have flagged reduced cobalt output due to low ore grades, asset closures, or maintenance at key mines. These production curbs reduce the buffer between mine output and demand, leaving less margin for error. Even small disruptions feed into tighter physical availability, boosting price resilience.

3. Feedstock & Refining Bottlenecks

Even as battery‑makers reduce cobalt use, refiners and chemical suppliers say the real pinch is the shortage of quality cobalt feed‑stock (including recycled material). With less recycled and lower‑grade input, refined cobalt costs rise, affecting downstream pricing. Higher conversion costs and narrower feed‑stock inventories cause elevated cobalt premiums, which trickle into alloys and magnet manufacturing.

Forecasted Price Action for Cobalt

• Short term (now–mid‑2026): Expect firm to rising prices. The DRC quota regime and latent production cuts make the market sensitive to even modest supply hiccups.
• Medium term (2026+): While structural demand growth (especially in batteries) is slowing due to lower‑cobalt chemistries, supply risk remains high. Price spikes are likely when mining/exports falter again, but steady, large gains may be constrained unless a major disruption occurs.

Cobalt Price Trend

Cobalt price (US$/metric tonne), showing strong rise since early Q3 2025 following export‑policy changes in the DRC

What This Means for SmCo & AlNiCo Magnet Buyers

With cobalt costs under upward pressure, magnet producers using Samarium‑Cobalt (SmCo) and Alnico alloys find their base‑metal cost exposure increasing. Expect:

• Higher alloy surcharges or premiums passed down from cobalt.
• Potential lead‑times rise, as manufacturers hedge supply or lock in longer contracts.
• Strategic window for buyers: lock‑in pricing now or risk higher cost bases as the constraint persists.

Implications for Dura Quotes

Given the ongoing volatility in cobalt markets, Dura Magnetics advises that quotations for Samarium Cobalt (SmCo) and Alnico products may carry reduced pricing validity periods. As cobalt represents a significant portion of these alloys’ material cost, rapid shifts in market pricing can affect overall production costs. Dura will continue to monitor the situation and adjust quote durations or alloy surcharges as necessary to maintain fairness and supply continuity for our customers.

Bottom Line

Cobalt’s price momentum isn’t being driven purely by battery demand any more, it’s being shaped by supply‑side policy, producer behavior, and feed‑stock scarcity. For magnet consumers and specifiers, that means cost base dynamics are shifting. The time to evaluate contracts, surcharges and alloy exposure is now, before the next supply shock sends prices even higher.