How Are Cobalt and Lithium Prices Currently Trending?
The cobalt and lithium markets continue to experience significant price fluctuations in mid-2025, driven by complex supply-demand dynamics and anticipated policy changes. According to the latest market data from Shanghai Metal Market (SMM), lithium carbonate prices have stabilized after initial downward pressure, while cobalt prices remain volatile as the market awaits critical policy announcements from the Democratic Republic of Congo (DRC).
Battery-grade lithium carbonate has settled at approximately 60,450 yuan per metric ton, with industrial-grade slightly lower at 58,850 yuan per metric ton. This relative stability comes after months of significant price corrections throughout the battery material supply chain.
"The lithium market has finally found temporary equilibrium after prolonged oversupply conditions pushed prices down from their 2023 peaks," notes industry analyst Wei Chen. "However, this stability remains fragile as both supply expansion and demand uncertainty continue to create competing pressures on pricing."
Meanwhile, cobalt and lithium prices are experiencing heightened volatility, with refined cobalt and cobalt sulphate both showing fluctuating trends. Market participants are particularly focused on the DRC's upcoming policy announcement expected by the end of June 2025, which could significantly impact global cobalt production and pricing.
Key Price Indicators
- Battery-grade lithium carbonate: Stabilized at 60,450 yuan/mt
- Industrial-grade lithium carbonate: Holding at 58,850 yuan/mt
- Lithium hydroxide: Continuing downward trajectory due to weakened cost support
- Refined cobalt: Maintaining fluctuating trend with limited transaction volumes
- Cobalt sulphate: Slight decline with significant volatility anticipated following DRC policy clarification
The price relationship between various battery materials reveals important market dynamics, with lithium hydroxide prices following lithium carbonate downward, creating cascading effects throughout the battery material supply chain.
What's Driving the Lithium Market Dynamics?
The lithium market in 2025 finds itself balancing between persistent oversupply conditions and steady but unspectacular demand growth. This delicate equilibrium has created a price environment where significant movements in either direction are constrained by opposing market forces.
Supply-Side Factors
On the supply side, lithium ore prices have been fluctuating within the $600-620 per metric ton range, despite attempts by overseas mines to establish rigid price floors around $630 per metric ton. This price resistance highlights the growing power of downstream buyers in an oversupplied market.
"Downstream lithium chemical plants and purchasing traders, driven by pessimistic expectations for future lithium chemical prices, showed weak purchase willingness for high-priced lithium ore," reports SMM analysts in their June 2025 market assessment.
The persistent production surplus continues to create significant inventory pressure throughout the supply chain. Abundant available material limits the potential for price increases, even as some producers attempt to implement price floors.
Key geological factors are also influencing the market, as the quality differential between various lithium sources becomes increasingly important. High-grade spodumene from Australian hard-rock deposits commands premium pricing compared to lower-grade South American lithium brine market insights, creating a tiered pricing structure within the broader market.
Demand-Side Factors
On the demand side, purchasing behavior remains cautious across most market segments. According to SMM market intelligence, "downstream material enterprises maintain a cautious procurement strategy, primarily focusing on restocking based on immediate demand, with no large-scale stockpiling emerging yet."
This just-in-time purchasing approach reveals important aspects of market psychology, as buyers remain reluctant to build significant inventory positions despite relatively favorable pricing compared to historical peaks. This behavior suggests persistent concerns about future price direction and overall demand stability.
The lithium carbonate futures market has also returned to fundamental factors after previous disruptions caused by macroeconomic sentiment and speculative trading activity. This normalization of futures pricing provides a more reliable indicator of market expectations and has contributed to price stabilization in the physical market.
"The hesitation among buyers to stockpile material even at current price points signals underlying concerns about medium-term demand growth, particularly as NEV production faces headwinds in several key markets," explains Dr. Sarah Johnson, mineral economist at Global Battery Insights.
What's Happening in the Cobalt Market?
The cobalt market stands at a critical juncture as anticipation builds around the Democratic Republic of Congo's forthcoming policy announcements. As the source of approximately 70% of global cobalt production, DRC's regulatory decisions have outsized impacts on global supply chains.
Supply Constraints and Policy Impacts
Market participants are anxiously awaiting the DRC's official announcement regarding cobalt export policies, expected by the end of the week (June 20, 2025). Speculation centers around whether the government will implement export restrictions, quota management systems, or other regulatory controls that could significantly impact global supply.
The uncertainty surrounding these policy decisions has already influenced market behavior, with refined cobalt smelters operating at reduced rates due to profitability concerns. This production adjustment further tightens available supply while the market awaits clarity on future export regulations.
"The uncertainty surrounding DRC policy has created a wait-and-see attitude throughout the supply chain," notes industry consultant Michael Thompson. "Historical precedent suggests that any export restrictions could trigger significant price volatility, particularly for grades used in battery production."
Supply chain uncertainty has led to cautious behavior among both producers and consumers, with many companies postponing major battery metals investment decisions until the regulatory landscape becomes clearer.
Demand Patterns
Despite the supply-side uncertainty, actual market transactions remain relatively sluggish. SMM reports that "influenced by the DRC's policy-related news, some smelters and traders reported an increased willingness of downstream producers to inquire about prices," but these inquiries have not yet translated into significant transaction volumes.
Most downstream consumers continue to operate by depleting existing inventories rather than making substantial new purchases, reflecting a calculated risk assessment regarding near-term price movements and supply availability.
The limited transaction activity despite looming supply risks highlights the complex interplay between speculative behavior and actual material requirements in the cobalt market. While concerns about future availability might normally drive precautionary purchasing, current market conditions have created resistance to building significant inventory positions.
How Are Battery Material Prices Responding?
The battery material market continues to evolve in response to upstream raw material trends and downstream demand patterns, with different cathode and anode chemistries experiencing varying price trajectories.
Cathode Materials
Ternary cathode materials (NCM/NCA) have seen continued price declines due to a combination of weak market demand and industry overcapacity. This downward pressure reflects both the challenging market conditions in the NEV sector and the growing competition among cathode material manufacturers.
Lithium iron phosphate (LFP) materials have experienced a slight price decrease of approximately 60 yuan per metric ton, following the modest decline in battery-grade lithium carbonate prices (down about 200 yuan/mt). This relatively minimal movement demonstrates the stronger resilience of LFP pricing compared to other cathode chemistries.
Lithium cobalt oxide (LCO) materials continue their downward trend, with prices for 4.2V specification products hovering around 208,000 yuan per metric ton. Higher voltage variants command premium pricing, with 4.4V specifications at 212,000 yuan/mt and 4.5V products at 223,000 yuan/mt.
"The price differential between various cathode chemistries continues to influence battery design decisions, with cost-sensitive applications increasingly favoring LFP despite its lower energy density," explains Dr. Li Wei, battery materials researcher.
Anode Materials
Artificial graphite prices have declined due to weakened cost support and persistent supply-demand imbalances. The production capacity expansion that began in 2023-2024 has created significant oversupply conditions, putting downward pressure on pricing despite the growing overall market size.
Natural graphite pricing has remained relatively stable but faces increasing competitive pressure from improving artificial graphite technologies. The performance gap between these materials has narrowed significantly as manufacturers have improved the energy density and cycle life of artificial graphite products.
"Relying on the cost-effectiveness advantages brought about by technological breakthroughs, artificial graphite anodes have begun to seize market share from natural graphite in applications where the performance differential is no longer decisive," notes SMM analysts.
This market competition has accelerated innovation in both segments, with natural graphite producers focusing on higher-purity products with enhanced conductivity, while artificial graphite manufacturers continue to reduce production costs through process optimization.
What's the Outlook for Energy Storage Systems (ESS)?
The energy storage system market has emerged as a bright spot amid challenges in the broader battery sector, with growing demand helping to offset some of the weakness in NEV-related battery applications.
Market Developments
The small-scale energy storage market has shown notable recovery in recent months, providing important diversification for battery manufacturers facing headwinds in the automotive segment. This demand shift highlights the increasingly complex relationship between different end-use applications within the broader battery ecosystem.
One significant catalyst for market growth has been the reduction in US tariffs on imported energy storage systems, which has boosted order volumes and production enthusiasm among manufacturers targeting the North American market. This policy change has created new export opportunities for Asian manufacturers while improving project economics for US developers.
A recent 500MW/2,000MWh grid-side ESS project in Inner Mongolia was awarded at 0.629 yuan per watt-hour (for the complete EPC project), providing an important reference point for large-scale system pricing. This project represents one of several major grid-support installations being developed across China to support renewable energy integration and grid stability.
"Large-scale ESS projects like the Inner Mongolia installation demonstrate the growing role of battery storage in enabling renewable energy expansion," says energy analyst Zhang Wei. "The pricing point achieved represents significant improvement in project economics compared to similar installations from just 18-24 months ago."
Battery Cabinet Pricing
Current pricing for standardized battery cabinets remains relatively stable:
- 5MWh DC-side battery cabinets: Average price holding at 0.432 yuan/Wh
- 3.44/3.77MWh DC-side battery cabinets: Average price at 0.437 yuan/Wh
This pricing stability reflects the balancing effect between downward pressure from battery cell cost reductions and upward pressure from growing demand. Industry analysts expect prices to remain relatively stable in the near term as these opposing forces continue to offset each other.
The economics of energy storage projects continue to improve as declining battery costs combine with advancements in system integration, energy management software, and balance-of-system components. These improvements are expanding the range of economically viable applications for battery storage across utility, commercial, and residential markets.
How Is the New Energy Vehicle (NEV) Market Affecting Battery Demand?
The new energy vehicle market's current challenges are creating significant ripple effects throughout the battery supply chain, with implications for production volumes, technology choices, and pricing strategies.
Production and Inventory Challenges
NEV production has slowed noticeably in recent months due to high inventory levels of finished vehicles, creating downward pressure on battery demand. This production adjustment reflects both seasonal factors—June representing a traditional off-season for NEV sales—and broader market saturation concerns in some key regions.
The combination of ambitious production targets and moderating consumer demand has created inventory imbalances that require careful management. Many automakers have adjusted production schedules downward to allow sales to catch up with existing inventory, directly impacting demand for battery cells and materials.
"The NEV market is experiencing growing pains as the initial surge of early adopters gives way to the more gradual mainstream market development," explains automotive analyst Wang Chen. "This transition requires recalibration of production strategies across the supply chain."
These adjustments are particularly significant given the capacity expansion that occurred during the 2023-2024 period, when many manufacturers increased production capabilities in anticipation of continued exponential growth.
Structural Market Changes
The battery market is experiencing important structural changes as demand patterns evolve. The growing energy storage segment is partially offsetting weakness in the NEV sector, allowing some battery producers to redirect capacity toward these applications.
Production adjustments are occurring unevenly across different chemistries and form factors, with cell manufacturers revising production schedules based on both overall demand conditions and shifting technology preferences among automakers.
One notable technology trend is the increasing adoption of 6-series ternary cathode precursors at the expense of both 5-series and 8-series products. This shift reflects automakers' efforts to optimize the balance between cost, energy density, and safety characteristics as the market becomes increasingly competitive.
"The transition toward 6-series cathodes represents the market finding an optimal balance point between performance and cost considerations, particularly as battery pack sizes continue to increase in many vehicle segments," notes Dr. Huang Mei, battery technology specialist.
What's Happening in Battery Recycling?
The battery recycling sector is navigating challenging market conditions as declining raw material prices impact the economics of recovery operations. These challenges are particularly acute for certain process technologies and facility scales.
Market Conditions
Price coefficients for recycled materials have trended downward, particularly for ternary cathode precursors and lithium cobalt oxide (LCO) black mass. This decline directly impacts the economic viability of recycling operations, which depend on sufficient value recovery to offset processing costs.
Current recovery values for different battery chemistries show significant variation:
- LFP pole piece black mass: 2,200-2,300 yuan/mtu
- LFP battery black mass: 2,000-2,150 yuan/mtu
- Ternary pole piece black mass: Nickel-cobalt coefficient 72-74%; lithium coefficient 69-72%
- Ternary battery black mass: Nickel-cobalt coefficient 70-72%
These recovery rates and values determine the feasibility of recycling operations under current market conditions. The differential between pole piece and battery black mass values highlights the importance of battery disassembly processes in maximizing recovery economics.
Profitability Challenges
Profitability varies significantly across different recycling technologies and operational scales. Most wet-process producers are currently operating below their profitability threshold, creating financial pressure that may lead to capacity rationalization if conditions persist.
Grinding operations generally show slightly better margins than wet-process facilities, but many small and medium-sized grinding plants are still experiencing negative profits in the current market environment. This economic pressure is driving consolidation toward larger-scale operations with better economies of scale and more advanced recovery technologies.
"The recycling sector is experiencing natural selection, with more efficient operators gaining market share while marginal facilities struggle to remain viable," explains recycling industry consultant Li Jun. "This evolution will ultimately strengthen the sector, but the transition period creates significant challenges for many existing operations."
Market sentiment regarding lithium chemical prices remains pessimistic, causing cautious purchasing behavior throughout the recycling value chain. This hesitation further compounds the economic challenges facing recyclers as they struggle to maintain cash flow while awaiting more favorable market conditions.
What Are the Key Developments in Sodium-Ion Battery Technology?
Sodium-ion battery technology continues to gain commercial traction as an alternative to lithium-ion in specific applications, with significant progress in both technical performance and market adoption.
Market Progress
Strategic agreements between technology developers and potential users are accelerating, with multiple companies signing cooperation agreements for second-half energy storage system projects utilizing sodium-ion technology. These agreements represent important validation of the technology's commercial readiness for specific applications.
Application diversification is expanding beyond grid storage, with significant order increases reported for start-stop applications using both layered oxide and polyanionic compound chemistries. This diversification demonstrates the technology's ability to address multiple market segments with different performance requirements.
The cost reduction trajectory remains favorable, with increasing production scale of cathodes and electrolytes driving price declines that improve sodium-ion battery economics relative to lithium-ion alternatives. This scaling effect is particularly important for market segments where cost sensitivity outweighs absolute performance requirements.
"While sodium-ion technology isn't attempting to compete with lithium-ion in high-energy-density applications like long-range EVs, it's creating its own ecosystem in applications where its unique advantages can be leveraged," says Dr. Zhao Lin, battery technology researcher.
These advantages include excellent low-temperature performance, superior safety characteristics, and the elimination of critical materials like cobalt, nickel, and lithium—all of which make sodium-ion particularly attractive for specific use cases despite its lower energy density compared to advanced lithium-ion chemistries.
What Industry Partnerships Are Forming in Battery Recycling?
Strategic collaborations are reshaping the battery recycling landscape, with major industry players establishing partnerships to address the growing volume of end-of-life batteries and secure critical material supplies.
Strategic Collaborations
A significant recent development is the joint venture establishment between Toyota Tsusho and LG Energy Solution for automotive battery recycling in North Carolina. This partnership brings together Toyota's recycling expertise and LG's battery manufacturing knowledge to create an integrated approach to material recovery.
The facilities are planned to begin operations in 2026, reflecting the timing of anticipated battery return volumes as the first wave of mass-market electric vehicles reaches end-of-life. This timing allows the joint venture to establish operations ahead of the expected surge in available battery feedstock.
The operation will focus on pre-processing activities to extract valuable metals including nickel, cobalt, and lithium for reuse in new battery production. This "urban mining" approach represents an increasingly important source of battery materials as concerns about primary resource availability and environmental impacts grow.
"Cross-industry partnerships like the Toyota-LG joint venture demonstrate how the circular economy concept is transforming from theoretical ideal to business reality," notes circular economy specialist Dr. James Wilson. "These
Want to Stay Ahead of the Next Big Mineral Discovery?
Discovery Alert's proprietary Discovery IQ model provides instant notifications on significant ASX mineral discoveries, helping investors identify actionable opportunities in battery metals like cobalt and lithium before the broader market. Understand why major mineral discoveries can lead to significant market returns by visiting Discovery Alert's dedicated discoveries page and begin your 30-day free trial today.
