2 Cobalt Stocks Poised for Growth as U.S. Defense Department Restocks

The global cobalt market is tightening significantly as the US Defense Department initiates its first strategic stockpile rebuild in decades, seeking 7,500 metric tons over five years, coinciding with the Democratic Republic of Congo (DRC) extending its export ban. This confluence of renewed demand and persistent supply restrictions, which have already driven prices higher, strategically positions companies like Glencore to benefit from Western efforts to diversify critical mineral supply chains, while analysts anticipate continued market tightness and price support into early 2026.

Analysis

The global cobalt market is tightening due to a confluence of new, structural demand from the US government and persistent supply constraints from the Democratic Republic of Congo (DRC). The US Defense Logistics Agency (DLA) is initiating its first major cobalt stockpile purchase since the 1990s, seeking 7,500 metric tons over five years and reversing a decades-long trend of selling down reserves. This demand driver coincides with the DRC, which accounts for 77% of global supply, extending an export ban that has already contributed to a price increase from approximately $10 to $16 per pound. This environment strategically benefits Glencore (GLEN), whose Norwegian plant is one of only three identified as a potential supplier for the DLA contract and which increased its cobalt production by 19% year-over-year to 19,000 tons in H1 2025. In contrast, while China Molybdenum (CMOC) also grew production by 13% to 61,000 tons, its position is complicated by Western efforts to de-risk supply chains from Chinese control. The market outlook remains firm, with analysts expecting the DRC to implement a quota system after the current ban, likely keeping supply restricted and supporting prices through Q4 2025 and into early 2026.

Key Decisions for Investors

• Glencore (GLEN) is favorably positioned to capitalize on the tightening market, given it is a named potential supplier for the US DLA contract and benefits from the geopolitical trend of securing non-Chinese critical mineral supplies.
• While China Molybdenum (CMOC) exhibits strong production growth, investors should weigh the significant geopolitical risk associated with its Chinese control and its exclusion from the DLA tender, which may limit its upside relative to Western-aligned producers.
• Monitor the DRC's export policies post-September 2025, as the expected implementation of a quota system and logistical delays are the primary catalysts supporting a bullish price outlook for cobalt into 2026.