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Investing.com -- The cobalt market is experiencing significant shifts as the US Defense Department moves to rebuild strategic stockpiles for the first time in decades. This development comes amid ongoing export restrictions from the Democratic Republic of Congo (DRC), creating a complex landscape for key industry players.
The US Defense Logistics Agency (DLA) is seeking up to 7,500 metric tons of cobalt over the next five years in a contract worth approximately $500 million. This marks the first major cobalt purchase by the DLA since the 1990s, following years of selling down Cold War-era stockpiles from around 24,000 tons in 1990 to just 300 tons by 2022.
The DRC, which produces about 77% of global cobalt supply, extended its export ban by three months on June 21, continuing restrictions that began in February 2025. This has pushed cobalt prices from approximately $10 per pound in February to around $16 per pound in March, with prices remaining relatively stable since then.
Here are the top 2 cobalt stocks you should consider owning in 2025 according to UBS:
1. Glencore - The company’s Norwegian Nikkelverk plant has been identified as one of just three producers from which the DLA is seeking cobalt supplies, positioning it strategically in the US government’s supply chain. Despite the DRC export ban, Glencore increased its cobalt production by 19% year-over-year to 19,000 tons in the first half of the year. The company’s established position in both production and processing gives it significant advantage as governments seek to secure critical mineral supplies outside of Chinese control.
In recent news, Glencore has reportedly agreed to sell its Philippine copper refinery. Additionally, while Deutsche Bank lowered its price target on the company due to copper guidance concerns, JPMorgan reiterated an Overweight rating, anticipating an increase in group production in the second half of 2025.
2. China Molybdenum - As another key producer in the DRC, China Molybdenum (CMOC) has maintained strong production levels despite export restrictions, increasing output by 13% year-over-year to 61,000 tons in the first half of the year. While not named in the DLA’s tender documents, CMOC remains a dominant force in global cobalt production. However, its position may be complicated by growing Western concerns about reliance on Chinese-controlled supply chains for critical minerals.
UBS analysts expect the DRC government to implement a quota system after the current export ban ends in September 2025, which would continue to restrict cobalt flow into the global market. Even if exports resume in September, analysts note it would take until at least February 2026 for significant volumes to reach China, supporting prices through the fourth quarter of the year.
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