Supply Chain: Upstream and Midstream

Battery Material Markets Experience Short-Term Distortions in 2025, but Prices Stay Relatively Low. Markets for the three major battery raw materials in 2025 were driven by short-term distortions - inventory swings and waves of buying - not just supply-demand fundamentals. Policy decisions in resource-rich countries are now a wildcard that can tighten markets quickly. Lithium: China saw a sharp price rise as inventories fell and LFP cathode material output surged. This is amplified by strong procurement and over-ordering from the BESS value chain, and more recently Jan 2026) accelerated by changes to Chinaʼs export VAT rebate. Cobalt: The DRC introduced a ban on cobalt exports, and then export quotas, but the rollout has been slow. Even before full enforcement, the quota uncertainty tightened availability and supported higher prices. Nickel: Feedstock costs for nickel chemicals rose, the market was flooded with [non-battery] nickel cathode, and there was an uptick in nickel consumption in NMC pCAM. Despite all of this, prices continued their bearish trend regardless. Despite the price movements and distortions, prices remain reasonably low compared to previous years, and are still conducive to low battery costs.

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