Glencore's Strategic Pivot Amid Cobalt Supply Crunch

Glencore rapidly draws down Wuxi exchange cobalt inventories to meet Chinese battery maker contracts, forced by DRC export restrictions. Cobalt prices have surged 160%.

Facing a severe structural shortage in its own supply chain, commodities giant Glencore has been compelled to rapidly draw down its cobalt inventories. In an unusual move that has captured market attention, the company has withdrawn substantial volumes of the battery metal from the Wuxi exchange to meet delivery commitments to Chinese battery manufacturers.

A Rapid Drawdown from Exchange Warehouses

The scale and speed of the inventory reduction are notable. Stocks at the Wuxi exchange plummeted from approximately 7,870 tonnes at the end of January to just 3,934 tonnes by March 2026, representing one of the fastest drawdown rates in the exchange's history. Glencore itself was responsible for withdrawing the majority of this metal. The company declined to provide an official comment on these actions.

The Root Cause: Congolese Export Restrictions

The core issue originates in the Democratic Republic of Congo (DRC), which supplies roughly 72% of the world's cobalt. To support prices, which had fallen to nine-year lows, the DRC suspended exports in February 2025. Since October 2025, the country has enforced export quotas that are set to remain in effect at least until the end of 2027.

These restrictions have created a direct operational gap for Glencore. While the company produced 33,500 tonnes of cobalt in the DRC last year, its permitted export volume for this year is capped at only 22,800 tonnes. This disparity between production and export authorization explains why previous stopgap measures—such as transferring stocks from Malaysia to China—are no longer sufficient. Cobalt prices have surged 160% since February 2025, reaching $26 per pound.

Concurrent Strategic Restructuring

Alongside navigating the cobalt shortage, Glencore is undergoing a significant strategic transformation. Since February 2026, the company has been in talks to sell its 70% stake in the Kazakh zinc and gold producer Kazzinc to businessman Shakhmurat Mutalip. According to Bloomberg, the deal could be valued between $4 and $4.5 billion. Reports suggest Glencore may partially finance the purchase itself.

Simultaneously, the Financial Times reports that Glencore is poised to support Mutalip's $1.4 billion bid for a stake in the Eurasian Resources Group. This support would involve an $800 million prepayment in exchange for future ferrochrome supplies. The strategic direction is clear: a shift away from zinc and Kazakhstan, and a sharper focus on copper and critical metals. Following the collapse of merger talks with Rio Tinto, Glencore is now pursuing an organic restructuring.

The company's adjusted EBITDA for 2025 fell 6% to $13.5 billion, though performance in the second half of the year was 49% stronger than in the first half. The strategic repositioning is expected to be a central topic at the Annual General Meeting scheduled for May 28, 2026.