Cobalt hydroxide prices hit $25.44 per pound in early 2026—a 340% jump year-over-year , according to market data. The Democratic Republic of Congo, which controls more than 70% of global cobalt supply , banned exports in February 2025, then replaced the ban with strict quotas starting in October . Between December 2025 and February 2026, only 7,800 tonnes received export clearance—roughly 2,600 tonnes monthly , the Financial Times reported. That created a deficit of over 82,000 tons last year , according to trading house Darton Commodities.
The squeeze isn't easing. Market analysis suggests cobalt shortages driven by Congo curbs will continue influencing global supply conditions through 2030 , Darton said. Annual export quotas for 2026 and 2027 are capped at 96,600 metric tons—less than half the DRC's 2024 output . Chinese smelters, which refine most of the world's battery-grade cobalt, are scrambling. Declining import volumes of cobalt intermediates into China have forced refineries to modify operational plans and draw down existing inventory stockpiles .
The irony cuts deep: the metal essential to electric vehicle batteries—the technology meant to decarbonize transport—is now constrained by the same resource nationalism that has defined oil markets for decades. Downstream markets are starting to see growing price pressures as the impact of raw material shortages deepens across the cobalt supply chain , Darton noted.
Can Battery Makers Engineer Around Congo?
In 2024, the volume of cobalt deployed per vehicle declined by 25% year on year , according to Fastmarkets. Automakers have been working for years to reduce cobalt content in lithium-ion batteries, driven by cost and ethical sourcing concerns. But there are limits. The amount of cobalt in a battery cathode directly affects the battery's energy density, and despite a shift in research toward alternative cathode materials, cobalt remains a limiting factor in electric vehicle batteries , Chemistry World reported.
Lithium iron phosphate battery adoption rates increase across applications where performance trade-offs remain acceptable . LFP batteries, which contain no cobalt, have gained market share in China. But they sacrifice range—a trade-off Western consumers have been less willing to accept. Infrastructure development timelines for alternative supply sources require 3-5 year lead times minimum, indicating persistent market tightness until new production capacity becomes operational .
Meanwhile, Congo's government has made clear this isn't just about price. By controlling flows, Kinshasa aims to dismantle a structure where refiners capture profits while Congolese miners bear the risk, pushing for local processing to keep more value in the country , according to analysis from New America.
Will Data Centers Solve the Grid Problem—or Create a Gas Problem?
Three thousand miles away, a different infrastructure bottleneck is reshaping energy markets. FERC directed grid operator PJM to establish transparent rules to facilitate service of AI-driven data centers and other large loads co-located with generating facilities, safeguarding grid reliability and protecting consumers in the mid-Atlantic territory, which serves over 67 million Americans in 13 states and D.C. The December 2025 order, confirmed this week in FERC's June update, creates three new transmission service options for data centers that want to plug directly into power plants rather than wait years for grid connections.
The move looks like a win for speed. PJM has processed more than 170,000 MW of new generation requests since 2023, with approximately 57 GW of projects having completed PJM's study process and received interconnection agreements, but many remain stalled by local opposition, permitting delays, and supply chain challenges , according to analysis from Introl.
But here's the catch: A recent Bloomberg New Energy Finance analysis finds 100 GW of on-site gas-burning capacity are planned to power data centers across America —equivalent to 18% of total existing U.S. power capacity. Counterintuitively, it is data centers' independence from the grid—coupled with their use of natural gas—that will hike energy costs for American homes and small businesses, because natural gas is a market-traded commodity, meaning data centers that gobble up lots of natural gas will naturally compete with other gas customers, increasing prices , according to analysis from Energy Innovation published in Utility Dive.
Since natural gas supplies 43% of U.S. electricity and gas-fired generators set the price of electricity in most hours, higher natural gas prices also raise electricity costs . Analysis from Synapse Energy Economics projects PJM consumers will pay an extra $100 billion through 2033 as new data centers continue to exceed available power supply, with the 67 million people served by PJM having already absorbed an extra $9.4 billion in electricity bills during summer 2025, with another $1.4 billion increase locked in for summer 2026 .
Natural gas futures reflect the tension. Forward fixed prices at Henry Hub in Louisiana, the national benchmark, averaged near $3.30/MMBtu for the April-October summer strip, while neighboring Southern Natural topped $3.70 and Florida Gas Zone 3 approached $4.00, though a majority of Lower 48 hubs were below $3.00 for next summer , Natural Gas Intel reported in February. On Tuesday, Henry Hub natural gas closed at $3.25/MMBtu, -2.40%, according to market data.
