Battery raw materials market update April 2025

Key points

1. Low demand for lithium causes downward price trend
   The market outlook remains bearish, with weak downstream buying activity and little improvement in lithium demand expected in April. Even energy storage battery producers are slashing lithium orders. Despite a promising rebound in EV sales in Europe during the first three months of the year, lithium demand in the region is particularly weak. Most buyers are adequately stocked, and given the length of the supply chain, it could take several months for any positive demand registered in the first quarter to translate into improved upstream lithium demand.
   

2. Spodumene under pressure with decline in lithium demand
   Spodumene prices are on a downward trend due to ongoing weakness in lithium prices in China. While Australian miners have lowered their offer levels, buyers have also reduced their bid levels, creating a significant gap between miners’ and converters’ price expectations. Faced with firm offer prices from Australian producers, Chinese lithium converters are increasingly turning to cheaper feedstocks, including African spodumene, to cut costs and protect margins.
   

3. Elevated production costs bolsters lithium oxide prices
   Despite ongoing weak demand for lithium hydroxide, prices in the seaborne market have been on an upward trend in March. This is due to sellers maintaining firm offers driven by elevated production costs. Notably, in late March, the CIF CJK lithium hydroxide midpoint price regained a premium over carbonate. While short-lived, we anticipate that, in the longer term, lithium hydroxide and carbonate prices will converge, with hydroxide potentially moving to a premium.
   

What do our analysts say?

Recent tariffs announced by the Trump Administration have sent shockwaves through global markets, igniting fears of a global economic slowdown and potential recession. Any hopes for battery demand recovery this year could be easily derailed by higher vehicle prices, inflationary pressures, and disrupted supply chains. This spells ongoing challenges for lithium producers who have been struggling with steeply declining prices throughout most of 2024 and cutting costs and production in the hope of a meaningful and sustained supply-side response.

Paul Lusty, Fastmarkets

Key points

1. Bullish price movements follow DRC export ban
   The first full month of pricing in the cobalt market since the DRC announced the export ban has shown the full extent of the most bullish price movements we have seen in the market since 2022.
   

2. Cobalt prices surge while sulfate soars
   Standard-grade cobalt metal prices (low-end) skyrocketed to a peak of $15.75 per lb in mid-March. Monthly prices averaged at $13.90 per lb, up 45% month on month. The rise in cobalt sulfate prices has been even more severe, with prices rising 74% month on month.
   

3. Prices stabilize mid-month amid renewed Chinese optimism
   Prices did stabilize around the middle of the month with some of the gains lost. However, sentiment in China rose once again with gains in the Wuxi futures contract on the ongoing uncertainty about what the DRC government has in store next.
   

What do our analysts say?

If the DRC government wanted to flex its muscles and show miners and refiners who really controlled global cobalt reserves, it would appear they’ve succeeded for now. Standard grade cobalt metal prices soared to highs not seen since November 2023 in the space of 2 weeks. The market is now awaiting what’s next and what, if any, controls will be placed on the export of cobalt intermediates. Negotiations are understood to be ongoing, but if the latest announcement that the government could extend the ban is anything to go by, it would appear we’re not closer to finding out what happens at the end of June.

Rob Searle, Fastmarkets

Key points

1. Nickel prices stall in April
   A modest rally in the LME nickel cash price above the $16,000 per tonne level fizzled out, leaving the price up by only 1.6% for the month.
   

2. Indonesian royalty hike drives prices up
   Reports that the Indonesian government was seeking to raise royalties across the mining industry also helped push prices higher.
   

3. Oversupply concerns trigger market sell-off
   The fundamentals reasserted themselves, however, with indications that the market remains heavily oversupplied in early 2025. As a result, the market sold the rally.
   

What do our analysts say?

Indications from Indonesia point to a desire to increase royalties, which would raise costs for nickel producers and increase cost-support price levels. This, coupled with recent news from the Philippines, which is seeking to implement an ore export ban in five years, and production disruptions at PT Gunbuster in Indonesia, should all be supportive of prices. However, data released by the International Nickel Study Group highlighted that the market remains heavily oversupplied in early 2025. For the nickel price to stage a meaningful and sustainable rally, supply discipline will be required, including from Indonesian producers.

Olivier Masson, Fastmarkets

Key points

1. Muted manganese sulphate market as NCM demand lags in China
   The manganese sulfate market was quiet in March with limited spot deals and buying. China’s NCM pCAM market has yet to show a significant pickup in demand as we move into Q2.
   

2. Chinese HPMSM operating rates drop amid slow NCM demand
   Operating rates at Chinese HPMSM processors fell to 26% in February. This is not overly surprising given the closure of much of China’s manufacturing during the Lunar New Year holidays. However, the low rates highlight the slow demand from the NCM pCAM market, with utilization rates not having hit above 40% in China since October 2023.
   

3. Manganese prices rise in China on stronger ore costs
   Prices in China averaged 6,050 yuan per tonne across March, up 5.7% month-on-month. The majority of this gain was due to firming port-side high-grade manganese ore prices in China.
   

What do our analysts say?

The NCM pCAM market continues to move along slowly with a limited uptick in production following the holidays in February. The NCM market is also having to contend with the recent spike in cobalt prices, which is likely to limit production of mid-nickel CAM given the spike in costs. Alongside the higher cost of production, the imposition of tariffs on auto imports in the US is causing havoc for many Western OEMs’ EV plans. With nickel-based chemistries still the preferred type for the North American market, these challenges are only expected to further impact prices and demand for manganese sulfate.

Rob Searle, Fastmarkets

Key points

1. Excess supply sees graphite prices plummet to near bottom limit
   Fastmarkets maintains the view that Chinese graphite prices are near a floor. Prices dipped on the low end of the trading range in recent weeks, indicating that supply remains excessive and competition for business remains intense. Prices are now on par with the lowest levels Fastmarkets has noted since price reporting began on this product in 2018. Prices were last at this level in Q3 2020.
   

2. Chinese spherical graphite exports surge due to Indonesian demand
   Chinese spherical graphite (uSPG) exports are posting notable gains in early 2025 following the start of a rising trend in late 2024. The Chinese spherical graphite market has struggled over the past year amid intense competition from synthetic graphite and subsequent reductions in uSPG prices, output, and exports. Exports are recovering, despite continued sluggishness in prices, primarily reflecting the emergence of Indonesia as a consumer of Chinese uSPG. Chinese shipments of uSPG to Indonesia started last July but picked up in earnest in December. The shipments to Indonesia coincide with the start of BTR’s Indonesian anode production plant last August. Indonesia has now emerged as the largest export destination for Chinese uSPG in the first two months of 2025, with 42% of China’s uSPG exports in January-February 2025 destined for Indonesia.
   

3. US tariffs challenge China’s supremacy in the graphite anode industry
   China’s domination of the graphite anode industry, with 99% of global anode output, remains a significant hindrance to efforts by the US and Europe to develop localized and diversified supply chains. The new US presidential administration is addressing this conflict through tariffs and executive orders to promote domestic mining and processing of critical minerals, including graphite. In the past nine months, we have seen US tariffs on imports of Chinese synthetic graphite anodes rise from 0% in June 2024 to 45% in March 2025, with the potential for an additional 25-45% in tariffs expected this month.
   

What do our analysts say?

US electric vehicle and battery producers have battled in recent years to keep US imports of graphite anodes from China tariff-free, but their efforts have proved futile over the past nine months and the trade status of graphite anodes has shifted dramatically. The Section 301 exclusion granted to graphite anodes was eliminated last May, putting the US import tariff on Chinese anodes at 25%. In the first three months of 2025, we have seen tariffs rise an additional 20% to a total of 45%. We expect to see an additional 25-45% in tariffs imposed against China in early April, bringing the total tariff burden potentially to 70-90%. Chinese graphite anodes will no longer be entering the US at highly uncompetitive prices. For now, US consumers have few alternatives, but higher costs should help to promote expedited development of domestic supply chains..

Amy Bennett, Fastmarkets

Key points

1. Production scrap dominates battery recycling amid delayed end-of-life volumes
   Fastmarkets predicts that the majority of scrap batteries will continue to come from Chinese gigafactory production waste. In 2025, Fastmarkets projects that 30% of total battery scrap will originate from end-of-life batteries, while 70% will come from production scrap. There are significant concerns regarding current assumptions predicting when the volume of end-of-life scrap will increase. A combination of new battery technologies and changing consumer behavior indicates that EVs are not reaching end-of-life as quickly as previously estimated. This has led to a competitive black mass market, which has particularly impacted smaller Western recyclers.
   

2. DRC cobalt export ban fuels global black mass payable surge
   The DRC’s ban on the export of cobalt ore has caused a global surge in black mass payables. Most notably, since the ban, Europe’s payables for black mass have gone from 65% to a record-setting 71%. In the East, the ban on cobalt ore export has catalyzed fierce competition between S. Korean refiners and their Southeast Asian equivalents.  Southeast Asian refiners are now offering 78.5% payables for NCM/NCA black mass, 3.5% higher than refiners in S. Korea.
   

3. Northvolt bankruptcy highlights Europe’s struggles in battery recycling
   The final nail in the coffin for Europe’s battery poster child, Northvolt, was hammered with its formal declaration of bankruptcy in Sweden. Concerns are growing over whether Europe will be able to develop domestic recycling capacity without foreign help. Despite foreign investment, the cancellation of SungEel HighTech’s planned recycling plant in Gera, Germany, underscores the challenges of doing business in Europe. The project was derailed by slow planning approvals, strong local opposition, and a tough market environment, highlighting the obstacles faced even when there is clear commercial and political support.
   

What do our analysts say?

Turbulence in the cobalt market has driven significant increases in black mass prices, as refiners strive to address an acute shortage of cobalt feedstock. Historically, South Korea offered the highest payables, but its position has now been overtaken by its more integrated Southeast Asian competitors. In Europe, confidence remains low, with the recycling sector weakened by the fallout from Northvolt’s bankruptcy; the delay in end-of-life batteries entering the scrap market has intensified competition for scrap.

Luke Sweeney, Fastmarkets

25% US auto import tariffs take place from April, likely significantly hurting domestic vehicle sales in the months following. European and Chinese EV demand continues solid growth and could see renewed focus as the US weakens OEM profit margins.

Key points

1. US tariffs on vehicles trigger pre-buying surge and sales slump
   US tariff policy continues to change rapidly, with 25% import tariffs on virtually all imported vehicles and vehicle components taking effect April 2nd. This has created a rush for consumers to buy ahead of time, followed by a sharp fall in sales from April until tariffs are relaxed after significant domestic price increases.
   

2. Chinese EV demand grows 16% in Q1, driven by PHEVs
   Chinese EV demand growth looks to be a strong 16% throughout Q1 of this year. This is based on preliminary March numbers, growing month-on-month consistently throughout the quarter. This growth remains focused on PHEV sales at around 40% of EV sales. However, continued increases in battery pack size are making the difference less important when looking at battery demand.
   

3. Xiaomi faces scrutiny after fatal crash in Anhui province
   Xiaomi’s meteoric rise in the Chinese EV market may take a hit following a fatal crash that killed three in Anhui province. The tragic accident involved a standard-issue Xiaomi SU7, which has lower-capability self-driving features than higher-cost versions. This raises questions about limiting safety-impacting software to higher-specification models.
   

What do our analysts say?

Further tariff-driven inflation in the US will have a significant negative impact on automotive purchases and the EV industry if maintained, as the Detroit 3, in particular, are set to suffer due to the need to raise prices within the US to maintain profit margins and their heavily Mexico- and Canada-oriented supply chains. Of major US participants, Tesla comes out ahead under the current tariff environment.

Connor Watts, Fastmarkets