In 1978, the cobalt market was thrown into a state of great uncertainty, with soaring prices, limited supply, and accelerating demand. A critical shortage threatened to develop but never really materialized. To a great degree, the prices cobalt commanded on the free market induced Zambia, after consultation with other producers, to hike its prices. The effect was self-perpetuating, with each pricing-tier increase, producer and free market, encouraging the other to escalate. In each instance, Zaire followed suit. These developments took place against a background of a lack of readily available effective substitutes. Barring unforeseen developments that could greatly reduce the available supply, such as a previous production shutdown that lasted for several months, the supply of cobaltis likely to remain tight, but not critically short, for the next several years. Prices are expected to remain relatively high. Over the long term, 1985 and beyond, prospects are good for more readily available cobalt at more reasonable prices. Domestic production of cobalt and mining of deep sea cobalt-bearing manganese nodules could satisfy domestic demand and eventually result in lower prices. Thus, the short-term outlook is rather pessimistic, while over the long term the present precarious situation could be reversed.