Fastmarkets monthly BRM market update

Key points

1. Volatile lithium market reacts to forecasts, rumors and futures-driven swings
   Lithium prices swung sharply in November and early December, with sentiment and news driving the market. A pivotal moment came when Ganfeng Lithium’s chairman forecasted 30% demand growth for 2026, sparking a rapid price rally. Prices then reversed on rumours of CATL’s mine restart, highlighting the market’s acute sensitivity to headlines and speculation. The Guangzhou Futures Exchange (GFEX) amplified these swings, with futures-led volatility spilling over into spot prices and prompting sellers to hold back cargoes while buyers paused.
   

2. China’s ESS boom: lithium carbonate demand set to soar
   While EV sales growth has remained solid globally, the real story is the exceptional strength of the energy storage systems (ESS) market, which has powered robust lithium demand. Chinese battery manufacturers are running at full capacity to meet surging ESS orders, a trend amplified by international subsidies and policy support, especially in the US and Australia, prompting a rush to secure supply before incentives expire. Even as year-end caution sets in, cathode and battery production schedules remain strong, supporting ongoing inventory drawdowns and reinforcing a stronger outlook for lithium in 2026.
   

3. China’s lithium inventory declines as cathode and battery demand soars
   Modelling shows that a pronounced drawdown in lithium salt inventories continued, with China’s stocks falling to roughly 227,000 tonnes. This destocking, intensified since August, reflects strong purchasing by the cathode and battery sectors. Future lithium prices will depend on how effectively these inventories are absorbed by EV and ESS sales.
   

What do our analysts say?

The lithium market’s direction now hinges on three critical factors: the pace of inventory drawdown, the timing of mine restarts, and the resilience of ESS demand in 2026. If mine restarts are delayed while energy storage demand remains strong, prices could surge. However, any weakness in ESS uptake, negative headlines, or rapid supply additions could swiftly turn sentiment and trigger a sharp reversal.

Paul Lusty, Fastmarkets

Key points

1. DRC export quotas drive cobalt prices higher amid looming supply deficit
   Cobalt prices continued to rise in November, albeit to a lesser extent than they did in October, following the DRC’s unveiling of its export quota system. The market is coming to terms with the new dynamics now that the DRC, the world’s top producer of mined cobalt, is restricting exports to 87,000 tonnes per year in both 2026 and 2027. This will leave the market facing a supply deficit in both years.
   

2. Cobalt prices double year-on-year as market stabilizes
   Average November prices for cobalt standard grade, in warehouse Rotterdam, rose by 12% compared to October averages and were more than double the November 2024 average. The slowdown in the price increase suggests that the market has adjusted to the new conditions it will face in the coming two years.
   

3. DRC cobalt exports resume, but supply delays loom until Q1 2026
   The DRC has allowed cobalt exports to resume, but Fastmarkets understands that material has not yet left the country. Given shipping times between the DRC and China (the main destination for the DRC’s cobalt), Chinese refinery feedstock is unlikely to increase until well into the first quarter of 2026.
   

What do our analysts say?

The DRC’s quota system is set to squeeze supply in the next two years—unless the country revises quotas higher. Prices are already considerably higher than they were at the beginning of the year, and they are likely to remain elevated for as long as current quota levels remain in force. Cobalt is mostly used in batteries, and the longer prices remain elevated, the more likely it is that EV manufacturers will seek to move to low-cobalt or cobalt-free chemistries where feasible. This could slow demand in the medium term.

Olivier Masson, Fastmarkets

Key points

1. Nickel prices hit seven-month low, dropping below $15,000 per tonne
   The nickel cash price traded below the $15,000 per tonne level in November, dropping to a low of $14,280 per tonne, the lowest since Donald Trump’s “Liberation Day” sell-off in April.
   

2. Oversupply weighs on nickel market, limiting price recovery
   The market remains in a state of significant oversupply, leaving little room for bullishness. The coming months are likely to see a further decline in prices or, at best, a return to sideways consolidation.
   

3. Nickel oversupply persists, but Indonesian policy could shift market dynamics
   Although the market remains in a state of structural oversupply—and is expected to remain in surplus until 2028—supply-side risks are mounting. Indonesia, the world’s top miner of nickel, could take a firmer stance on restraining the country’s supply. There could also be delays in issuing mining permits in the New Year.
   

What do our

analysts say?

The nickel market has been in surplus since 2022, thanks to structural oversupply. With Fastmarkets forecasting the market to remain oversupplied until 2028, there is little scope to be bullish on prices in the near term. A recovery in prices will require greater supply discipline from Indonesia, the world’s top miner of nickel.

Olivier Masson, Fastmarkets

Key points

1. Battery-grade manganese sulfate prices stabilize after early November dip
   Battery-grade manganese sulfate prices lost some of the upward momentum seen in the latter stages of October, with prices weakening in early November. The range settled at 5,700–6,000 yuan per tonne for the remainder of the month.
   

2. Rising production in China tempers manganese price gains
   Price increases in November were likely tempered by rising battery-grade manganese production in China during the prior month. After rates fell to 42% in September, Chinese processors ramped up output again, with rates averaging 50% across the month.
   

3. China’s pCAM sector drives 32% surge in manganese demand
   Manganese demand from the pCAM sector in China rose in October, up 6% month-on-month and 32% year-on-year, reversing the trend seen in September.
   

What do our analysts say?

Despite some challenges arising in EV demand globally, NCM pCAM production and manganese demand continued to rise in October. One reason for this could be buyers restocking material in anticipation of higher raw material prices—namely cobalt sulfate—in the remainder of the year and early 2026.

Rob Searle, Fastmarkets

Key points

1. US-China trade agreement brings stability to natural battery anode market
   Natural battery anode markets have been more stable since the announcement of a trade agreement between the US and China, which is expected to provide a clearer picture of the restrictions faced by graphite markets over the course of the years-long agreement. 
   

2. Sythentic battery anode markets cool after recent gains
   Synthetic battery anode markets remain more active than the natural side of the market, but these markets have cooled after seeing gains across October and November.
   

3. Graphite flake market slows amid oversupply and weak demand
   Graphite flake is heading toward a quiet end of the year, with the market continuing to face both abundant supply and weak demand, with few signs that this dynamic will change in the near term.
   

What do our analysts say?

Graphite had a volatile start to the fourth quarter with the announcement of export restrictions on graphite by the Chinese government, followed by an agreement between the US and China weeks later that overrode that decision. Still, the current picture of what Chinese and US trade restrictions on graphite will look like for the next year now gives people a clearer view of a major factor that will help shape the market amid the current supply and demand dynamics. 

Andrew Saucer, Fastmarkets

Key points

1. India’s black mass export ban disrupts global supply chains and spurs price spikes
   India has tightened regulations on black mass exports, classifying it as hazardous waste and halting shipments since October 2025. The crackdown aims to retain critical metals for domestic recycling, disrupting global supply chains and driving price spikes. Future rules may include licensing and long-term contracts, reducing spot market liquidity. Around 200–300 tons of black mass remain stranded at Indian ports, with reports of 3,000 tons illegally exported earlier this year.
   

2. Black mass payables hit record high amid supply shortages and aggressive buying
   Fastmarkets NCM black mass CIF South Korea nickel and cobalt payables hit an all-time high of 85% on November 26, 2025. This is driven by a supply shortage following the apparent Indian black mass export ban alongside increased demand for secondary metals following cobalt export restrictions from the DRC and rising lithium prices. South Korea and Southeast Asia saw aggressive buying, with NCM black mass payables reaching the highest levels since 2023. High-grade black powder commanded premiums above 100%.
   

3. US battery recycling projects shift focus to private funding amid DOE grant losses
   American Battery Technology Company (ABTC) lost its $57.7 million DOE grant for a Nevada lithium refinery, though it plans to proceed using private capital and loan options. Ascend Elements forfeited a $316 million DOE grant for its Kentucky recycling plant after failing to meet milestones, leaving its expansion uncertain. Redwood Materials, once approved for a $2 billion DOE loan, withdrew voluntarily, opting for private financing, including a $350 million Series E round. These shifts highlight a growing reliance on private investment for critical recycling infrastructure.
   

What do our analysts say?

Black mass prices are soaring to record highs, supported by an undersupply of primary cobalt, a lithium price recovery, and global black mass supply shortages aggravated by an apparent Indian black mass ban.

Julia Harty, Fastmarkets

Key points

1. Weak EV sales growth in China amid policy shifts and market decline
   November’s retail EV sales growth rate appears weak within China despite imminent policy changes set to weaken momentum further from January. EV sales were up just 3% year-over-year, while the overall passenger car market fell 11% year-over-year. However, retail passenger EV sales have grown a strong 20% year-to-date, and exports from the country continue to grow significantly. This retail EV growth rate in the struggling overall market puts November’s month-to-date EV penetration rate at over 61%, or 53.4% year-to-date as of mid-November.
   

2. CATL & Stellantis begin construction on 50GWh LFP battery plant in Spain
   CATL & Stellantis have broken ground on their joint venture battery plant in Spain, which is expected to begin operating next year to produce LFP cells for Stellantis’ mass-market vehicle offerings. The plant’s 50GWh capacity is enough to supply 1 million vehicles per year, depending on Stellantis’ pack size requirements, and will likely help lower EV prices in Europe, as the region still heavily relies on expensive high-nickel batteries.
   

3. UK introduces mileage-based tax for EVs, sparking concerns over electrification goals
   As part of the UK government’s budget announced on November 26th, plans have been introduced for drivers of electric vehicles to pay a mileage-based tax rate of 3p/mile for BEVs and 1.5p/mile for PHEVs. The intent is to account for lost tax revenue from EVs not paying fuel duty, but it is contributing to mixed messaging regarding the government’s electrification ambitions due to the expected reduction in EV sales resulting from this new disincentive.
   

What do our analysts say?

US EV sales fell significantly in October, with BEVs bearing the brunt of the impact of losing subsidies. US BEV sales fell 33% year-over-year, while PHEVs fell a comparatively strong 21%, though this is relative to a historically strong October period that set records last year. Growing EV sales elsewhere in the world will mitigate the US’s lost sales volume, though considering this administration’s hostility toward EVs, a protracted weakness in US EV sales shouldn’t be ruled out.

Connor Watts, Fastmarkets

Key points

1. Europe surpasses 100 GW energy storage milestones, led by battery systems
   Europe’s energy storage milestone is being driven overwhelmingly by battery energy storage systems (BESS). Recent reports show that Europe (including the EU, the UK, and Nordic countries) has surpassed 100 GW of deployed storage capacity as of November 2025, with BESS accounting for the dominant share of new installations and the primary engine of growth. This highlights the central role of battery storage in Europe’s clean-energy transition, underpinning renewable integration, grid flexibility, and the shift toward a more resilient power system. 
   

2. North American BESS integrators struggle amid supply chain challenges and margin pressures
   Despite booming global interest in battery storage, insufficient local cell supply has placed significant pressure on North American BESS integrators. In FY2025, we observed a disappointing performance from a major system integrator, with simultaneous declines in both top-line and bottom-line results. This underscores how even leading players struggle amid contract delays, margin compression, and an increasingly competitive supply-chain environment. These challenges reflect broader systemic issues across U.S.-based battery storage integrators, many of which rely heavily on imported battery cells and lack the vertical integration or financial resilience needed to absorb cost fluctuations and delivery delays.
   

3. China’s ESS battery shipments surge amid policy reforms and market growth
   China’s ESS battery shipments have risen month-on-month since July, supported by the rollout of the national “Document No. 136” and accelerating provincial incentives. The policy shifts renewable power fully to market-based pricing and removes the previous requirement for new wind and solar projects to include mandatory storage, allowing ESS to grow through market demand and emerging revenue streams such as arbitrage and ancillary services. Coupled with new local capacity-compensation schemes, these reforms have strengthened project economics and stimulated procurement activity, driving a steady rebound in domestic ESS battery orders and shipments.
   

What do our analysts say?

A new growth direction is emerging for the battery storage sector as AI data centers (AIDC) rapidly expand their power demand. Historically, energy storage in most markets has been deployed primarily as backup power and for frequency regulation, typically requiring only 1–2 hours of discharge duration. By contrast, AIDC-driven applications are shifting storage toward a peak-shaving plus backup model, with required durations rising to around 6 hours as data-center loads create more sustained stress on local grids. After months of exploration and discussion in the first half of this year, AIDC-related storage is now moving into concrete planning and production scheduling, and the market is expected to enter its first real growth phase next year.

Walter Zhang, Fastmarkets

Key points

1. Battery cell costs spike in October amid rising demand and cobalt prices
   Battery cell costs for both NCM and LFP chemistries rose sharply in October, with NCM cells seeing the largest month-on-month increases of up to 6.5%. This surge was primarily driven by excess demand for tier-one lithium-ion batteries and significant price hikes in key raw materials, especially cobalt. 
   

2. DRC’s cobalt export restrictions highlight tensions with Chinese trade partners
   The Democratic Republic of Congo’s (DRC) recent introduction of cobalt export restrictions underscores the growing divergence of interests between China and its Central African trade partners. While Chinese companies aim to maximize profit margins by controlling the entire ore-to-sulfate value chain, tensions are emerging as ore-producing nations like the DRC become increasingly focused on developing their own domestic refining capabilities.
   

3. Automation gains in battery production offset by rising raw material costs through 2030
   Looking ahead, Fastmarkets forecasts that, while automation and manufacturing efficiencies are expected to reduce production costs for NCM and LFP cells by up to 37%, these savings will be offset by rising costs for critical raw materials. Rising raw material prices will be the primary driver of the increase in CAM costs. Despite the recent downward revisions in lithium and nickel prices, Fastmarkets’ BCI predicts that higher CAM raw material costs will drive a gradual increase in cell costs through 2030.
   

What do our analysts say?

Strengthening lithium and cobalt prices have been the primary driver for NCM cell costs increasing 5.8–6.5%. While there has been a general trend of increasing nickel content in NCM cells, low cobalt prices in 2024 and early 2025 shifted the dial toward lower nickel NCM chemistries as many cell producers opted for the less moisture-sensitive, higher cobalt NCM chemistries. As the DRC continues to implement their quota on the export of cobalt ore, we predict the market will continue to shift production, favoring higher nickel chemistries.

Luke Sweeney, Fastmarkets

Key points

1. Market buzz: CATL mine rumours stir price
   Prices dipped at the end of October as rumors within the market indicated that CATL’s Jianxiawo lepidolite mine would reopen ‘soon’. With several different accounts of when ‘soon’ may be, some even reporting the mine was already reopening, these rumors were unable to be verified as CATL provided no update. Despite the bearish sentiment that the rumors had on the price, the mine, once reopened, will take time to come online and ramp back up. Given this and the news that CATL has been purchasing ore for November, it is unlikely that supply will hit the market, at least for November.
   

2. China’s ESS boom: lithium carbonate demand set to soar
   The focus on ESS (Energy Storage System) growth within the Chinese industrial strategy has led to strong demand within the market and has provided price support going into the end of the year. Within the newest forecast, Fastmarkets expects lithium-related ESS demand to increase by over 20% from 2025 to 2026. As the predominant cathode chemistry for ESS applications in China is LFP, it will be lithium carbonate that will benefit most from this increase in demand.
   

3. Spodumene prices surge: ESS demand and year-end restocking drive market activity
   Spodumene prices have been increasing, in light of demand from ESS, as well as from seasonal demand with restocking activity before the end of the year. The declines, as mentioned in point 1, due to the CATL rumors, also led to increased buying activity with participants capitalizing on the downtrend. As the cure for high prices is high prices, continuing price rises may see some participants take a step back. There seems to be enough material in the market to cover current demand, but with the flurry of activity from the ESS market, as well as increased positive sentiment that prices may recover next year, we may yet see prices continue to rise over the coming months with a replenishing of inventories.
   

What do our analysts say?

We expect prices to remain strong for Q4; the lithium market sentiment is positive with strengthening demand from the downstream sector, particularly in light of the Chinese policy focus on the growth of the ESS sector. Whilst we did see prices wane at the end of October as rumors continue to swirl in regards to the reopening of CATL’s mine, these rumors were unable to be verified.

Claudia Cook, Fastmarkets

Key points

1. DRC’s cobalt quota sparks price surge amid future supply concerns
   The market has been coming to terms with the Democratic Republic of Congo’s (DRC) quota system, which was unveiled at the end of September. The 87,000 tonnes of cobalt exportable per year from the country are likely insufficient to keep the market in balance in 2026 and in 2027. As a result, cobalt prices rose strongly in October.
   

2. Seaborne cobalt prices soar: October see 28% surge
   Prices in the seaborne market, which had started to climb towards the end of September as the market took on board the quota’s implications, continued to rise throughout October. The monthly average price for standard grade, in warehouse Rotterdam, jumped by 28% to $20.6 per lb, with the low-end of the price range standing at $23 per lb at the end of the month.
   

3. China’s cobalt imports surge: DRC exports set to boost supply in 2026
   Imports of cobalt metal into China reached a near-term high in September, as producers scrambled for feed. There was also a surprise sequential increase in hydroxide imports into China in September, although overall volumes were low. With the DRC allowing exports to resume in mid-October, material should start to arrive in China in early 2026.
   

What do our analysts say?

Fastmarkets expects the DRC’s quota system to squeeze supply in the next two years–unless quotas are revised higher. This has already caused prices to surge, and prices are likely to remain elevated for as long as current quota levels remain in force. With cobalt mostly used in batteries, where cobalt content can be altered, the longer prices remain elevated, the more likely it is that EV manufacturers will seek to move to low-cobalt, or cobalt-free chemistries. This could slow demand in the medium-term.

Olivier Masson, Fastmarkets

Key points

1. Nickel prices hold steady: October averages $15,080 per tonne
   The nickel price continued to trade either side of the $15,000 per tonne level in October. The LME nickel cash price averaged $15,080 per tonne, down by 0.15% from the $15,102 per tonne average in September.
   

2. Nickel oversupply persists: Indonesia key to restoring market balance
   The market remains in a state of significant oversupply, a situation that has persisted since 2022. With Indonesia as the largest producer of nickel, the country must be part of the supply discipline needed to bring the market back into balance.
   

3. Indonesia’s mine quota reviews and royalties pose supply risks
   Indonesia is now implementing annual mine quota reviews–which could be used to limit supply–and has increased royalties. There is also greater environmental oversight in the country. However, these are merely supply risks since no concrete measures have been taken to limit domestic production significantly. Until concrete measures are announced, the price is unlikely to find support.
   

What do our

analysts say?

Structural oversupply has left the nickel market in surplus since 2022, leading to weakening nickel prices. Since Fastmarkets expects another large market surplus this year, and for surpluses to continue, it is hard to expect any near-term improvement in pricing. For prices to see any significant upside, greater supply discipline is required.

Olivier Masson, Fastmarkets

Key points

1. Battery-grade manganese sulfate: October stability, November dip
   Battery-grade manganese sulfate prices were largely rangebound throughout October before once again seeing a small rise in the assessed range in the final week of the month. Some of these gains were reduced in early November with the range settling lower on November 7.
   

2. Production slows on high-purity manganese sulfate
   Following the rise in high-purity manganese sulfate production that we saw in August, rates slowed once again in September, falling to 42% across the month. This level is still the second-highest monthly production rate of the year.
   

3. September sees marginal decline in manganese demand amid NCM challenges
   Demand from China’s pCAM sector showed a marginal decline in manganese demand in September, highlighting the ongoing challenges in the NCM market.
   

What do our analysts say?

Our expectations of ongoing strengthening battery-grade demand and production in China in Q4 have been tempered somewhat by ongoing challenges within the NCM market. While we expect a level of demand ramp-up in Q4, in the wider context of geopolitical challenges and a challenging Chinese market, the manganese demand uptick in the short term could be somewhat tempered.

Rob Searle, Fastmarkets

Key points

1. US-China trade agreement brings clarity to graphite anode material flow 
   An agreement between the US and China that stabilizes trade relations for the next year is set to provide a clearer picture about the flow of graphite anode materials but will still shape the flow of battery graphite given the market’s weak short-term fundamentals. 
   

2. Sythentic graphite gains slow amid US-China trade stability
   Recent gains on the synthetic side of the market have slowed following the stabilization in US and China trade relations; however, green petroleum coke, one of the few parts of the market that China imports from the US, is still pushing higher.
   

3. Graphite flake markets stagnate amid weak supply and demand in China
   Graphite flake markets remain stagnant as weak supply and demand fundamentals in China leave little room for the market to move higher through the end of the year.
   

What do our analysts say?

The agreement between the US and China to roll back planned export restrictions on markets such as graphite is set to provide a stable picture for the next year. However, for graphite, it leaves many existing trade barriers in place which should solidify shifts in how China and the US are finding alternatives to each other in their natural and synthetic supply chains. 

Andrew Saucer, Fastmarkets

Key points

1. Black mass value surges as cobalt prices rise
   Since late September, Fastmarkets’ cobalt standard grade in-whs Rotterdam has surged 43% to $50.71/kg, setting a record high since black mass pricing began in May 2023. This price spike has lifted NCM black mass value by about 25% across Europe, South Korea, Southeast Asia, and the U.S., while China saw a smaller 19% increase due to higher lithium payables. For LCO chemistries, the impact is even stronger, with gains of 53% in South Korea and 55% in Europe.
   

2. LFP boom drives battery recycling innovation
   As LFP, a cobalt-free chemistry, becomes more prevalent, recyclers face a new challenge: its lower intrinsic value compared to nickel-rich chemistries makes recycling less profitable, creating an urgent need for cheap, practical solutions. Recent research from Rice University introduces a process that uses only electricity and water to recover 94% of lithium at 99% purity from LFP cathodes, consuming one-tenth the energy of conventional methods.
   

3. Tech giants enter the recycling business to power the AI boom with second-life batteries
   As AI drives an unprecedented surge in energy demand, tech leaders are turning to waste EV batteries. Redwood Materials recently launched Redwood Energy, a division dedicated to repurposing EV batteries into large-scale energy storage systems (ESS). A few weeks ago, Redwood received funding from Nvidia’s investment arm, NVentures, showing a growing interest in big tech getting their hands on accessible batteries to feed their energy-hungry data centers.
   

What do our analysts say?

The recent surge in cobalt prices to record highs has temporarily eased pressure on recyclers, transforming cobalt-rich black mass into a highly sought-after feedstock and boosting margins. This relief comes at a critical time for the recycling market, which has been grappling with limited feedstock availability, low operating volumes, and mounting financial losses—further compounded by regulatory challenges such as the reclassification of black mass as hazardous waste in Europe.

Andre Cortesao, Fastmarkets

Key points

1. UK EV market hits 37.5% share in October, BEVs maintain 2:1 lead over PHEVs
   EV sales within the UK grew to 37.5% market share in October, growing over 24% in a marginally growing new car market. BEV sales grew slightly less quickly than PHEV sales, the former growing 23.6% year-over-year, but BEV sales still resoundingly outnumber PHEVs at a 2:1 ratio despite advances from new Chinese entrants threatening to sell more PHEVs.
   

2. Chinese passenger vehicle sales stall in October
   Chinese passenger vehicle sales growth hit a bit of a roadblock in October, as passenger vehicle sales grew just 0.6% while domestic NEV sales increased less than 10% year-over-year. This didn’t meet the Chinese Passenger Car Association’s expectations of 6% growth that was based upon wholesale sales growth, owing significantly to growing exports from China.
   

3. US light vehicle sales drop 4.5% in October amid EV demand weakness
   US light vehicle sales fell 4.5% year-over-year in October following a combination of weakening demand for EVs post-subsidy elimination and macroeconomic uncertainty worsened by the government shutdown.
   

What do our analysts say?

While the data coming out of the US isn’t exactly positive, it is well within expectations; it’s also worth considering that it will have been exacerbated by the government shutdown’s effect on consumer confidence. The Chinese market’s plateauing this month is largely noise, though the country’s new plans to halve subsidies and tax EVs at a reduced rate from January 2026 will bring some demand into November and December to round out Q4 more positively.

Connor Watts, Fastmarkets

Key points

1. Fluence secures Europe’s largest ESS project
   US-based system integrator Fluence has secured LEAG’s 1GW/4GWh energy storage project in Germany, Europe’s largest ESS deployment, underscoring that success in the market hinges on delivering complete projects rather than just hardware. While Chinese players dominate the hardware segment, Fluence prevailed through local compliance expertise, long-term partnerships, financial strength, and alignment with local economic transition goals. In contrast, Chinese competitors faced regulatory unfamiliarity, grid access challenges, and liquidity constraints. 
   

2. Korean and Japanese manufacturers poised to dominate North America’s ESS market
   Korean and Japanese manufacturers are set to capture the next wave of growth in North America’s ESS market as Chinese cell makers struggle amid ongoing trade tensions. Industry sources report that Samsung SDI is close to signing a 30 GWh ESS cell supply deal with Tesla, delivering 10 GWh annually, while LG Energy Solution, which secured a contract with Tesla in July, is negotiating to expand its ESS cell supply to 30 GWh. These developments underscore a strategic shift towards Korean and Japanese suppliers as reliability and trade stability become critical factors for large-scale ESS projects.
   

3. Nvidia highlights ESS as key to next-gen AI data centers
   Nvidia’s recent whitepaper on AI data centers’ (AIDC) 800V power supply highlights the critical role of battery energy storage systems (ESS) in next-generation AIDC construction. Demand for ESS in AIDC applications is surging, driven by the need to stabilize and smooth the impact of high-intensity AI training loads on the grid. Under its Two-Tier Energy Storage architecture, ESS deployed outside the DC will mitigate grid stress and enhance operational resilience. The integration of ESS in AIDCs is no longer a future trend—it is rapidly emerging as a major growth driver for the industry.
   

What do our analysts say?

The US ESS decoupling from China is accelerating, with the recent “one-year truce” between Washington and Beijing likely serving as a transitional phase for deeper separation. This period presents both challenges and opportunities: North America aims to localize, secure, and de-risk its supply chain, while China seeks to diversify markets and forge new cross-regional alliances. Korean manufacturers such as Samsung SDI and LG ES are ramping up US investments, expanding from plant construction to downstream sales.

Walter Zhang, Fastmarkets

Key points

1. China’s battery cell costs lead global market, driven by vertical integration
   Battery cell production costs in China remain substantially lower than in Western countries. Fastmarkets estimates the cost of an NCM 811 prismatic cell made in China was approximately 20% cheaper than the equivalent cell made in Hungary, and 46% cheaper than if the same cell was made in the United States. In China, vertical integration has proven to be key in driving down battery costs. 
   

2. China leads solid-state battery race
   China continues to set the pace in solid-state battery research, with leading companies such as BYD, Chery Auto, SAIC, CALB, and CATL all targeting commercial-scale solid-state production by 2027. The transition from liquid to solid electrolyte has been pivotal in surpassing the 1,000km range milestone for electric vehicles. Over the last 10 years, Western automakers stalled and delayed EV research and adoption, further investing in internal combustion engines (ICEs), whilst their Chinese counterparts invested heavily in solid-state research.
   

3. Western battery manufacturing faces cost challenges amid dependence on Chinese supply chains
   As the West develops its own battery manufacturing capacity, China remains heavily involved in the supply of the essential components for battery manufacture. Western cell costs are already much higher than those in China, even when the raw materials are supplied at competitive Chinese market prices. A full decoupling from Chinese battery component supply chains would make Western manufacturers even less competitive than their Chinese counterparts.
   

What do our analysts say?

There is the increasing realization in Europe that EV transition without China is feasibly impossible. Within Europe, we are seeing a growing trend of cooperation and partnerships, moving away from a more adversarial tone. Across the Atlantic, in the United States, the hostile political climate to Chinese manufacturing makes partnerships increasingly unlikely. Whilst the United States initially led EV adoption with Tesla, such companies may find themselves eating the dust if they are not able to keep up with China’s ambitious solid-state plans.

Luke Sweeney, Fastmarkets

Key points

1. Chinese lithium prices soar amid mining uncertainty
   The surge in Chinese lithium salt prices and spodumene prices continued into mid-August due to the possibility that more lithium mining operations in China may have to halt production while new mining plans and permits are agreed with the authorities. Carbonate prices climbed to a high of 87,000 yuan per tonne from June’s low of 59,500 per tonne, a rise of 46%. China’s hydroxide price rose 42% to 79,500 yuan per tonne from 56,000 yuan per tonne in July. Spodumene peaked at $1,027.50 per tonne, up 68.4% from June’s low of $610 per tonne. Seaborne China, Japan, Korea hydroxide prices climbed to $9.50 per kg from $7.95 per kg in late August.
   

2. Lithium prices dip as speculators and producers cash in
   While CJK prices have held up, Chinese salt prices and spodumene have retreated. Carbonate prices have pulled back to 72,550 yuan per tonne, hydroxide to 74,000 yuan per tonne, and spodumene to $835 per tonne. The pullback occurred due to profit-taking by speculators on the Guangzhou Futures Exchange (GFEX) and producers looking to take advantage of higher prices after what has been a tough time for producers.
   

3. Commodity market dynamics hint at potential lithium price stability
   The price pattern of rally followed by profit-taking/producer selling and consolidation is what you would expect in any commodity market. Given there are seven more mines that may face temporary production halts while they obtain the right permits, there could be more room for price increases or at least stability. Any loss in production will also help draw down lithium inventories that have built up over the past few years.
   

What do our analysts say?

The pullback in Chinese lithium prices seems normal market behaviour. All eyes are now on the fate of the other seven Chinese mines being scrutinised. More cutbacks will help tighten the supply-demand balance and prompt the use of inventories, which could underpin prices. We expect continued price instability in the near term with news about China’s production set to hold centre stage.

William Adams, Fastmarkets

Key points

1. Seaborne cobalt prices steady with limited growth
   Prices in the seaborne market remained relatively flat with limited upward momentum on the standard grade cobalt metal market.
   

2. US aims to secure $500M in cobalt for defense stockpiles
   The US is seeking to acquire up to $500 million worth of cobalt over five years to bolster its defense stockpiles and reduce reliance on foreign sources, particularly China. The material would be in cut cathodes or round form sourced from four named brands.
   

3. China’s cobalt imports decline amid DRC export ban
   July trade data showed another decline in cobalt hydroxide imports into China to feed refineries. However, given that exports from the DRC remain banned a greater month-on-month fall might have been expected. This indicates that there are still some units available to feed Chinese refineries but that these are limited compared to typical monthly availability of material.
   

What do our analysts say?

The sequential drop in Chinese cobalt hydroxide imports was not as great as might have been expected indicating that some material remains available. However, with typical lead times of around three months we expect lower import volumes in the months ahead as the DRC’s export ban bites. The ban is set to expire on September 22 so even if the DRC allows exports to resume later in the month new feed is unlikely to arrive in China before early 2026. It is therefore likely that refinery feed will tighten further over Q4 supporting prices.

Olivier Masson, Fastmarkets

Key points

1. Nickel prices stagnate amid weak market fundamentals
   Weak market fundamentals are keeping the nickel price rangebound on either side of the $15,000 per tonne level. The LME nickel cash price averaged $14,909 per tonne in August 0.8% lower than in July.
   

2. Focus shifts to nickel production cuts in China and Indonesia
   There have been significant production cuts outside of China and Indonesia in the past two years, but the focus is now on cuts in the two largest producers of refined nickel to accelerate the market’s rebalancing.
   

3. Indonesia tightens oversight on mining amid civil unrest
   In Indonesia there is rising government oversight of the industry, through mine permit issuance, rising royalties and greater environmental oversight. Moreover, there has been some civil unrest in August, although not directly mining-related.
   

What do our

analysts say?

The nickel market remains in significant surplus due to continued oversupply, a situation that has persisted since 2022, leading to falling nickel prices. With the market looking at another significant surplus this year, it is difficult to see any scope for an improvement in pricing. For prices to improve, there needs to be greater supply discipline in China and Indonesia given the scale of production cuts outside of these two countries in recent years.

Olivier Masson, Fastmarkets

Key points

1. Chinese manganese sulfate market stagnates with limited activity
   The manganese sulfate spot market remained quiet in China through August with limited liquidity. Prices were rangebound throughout the month.
   

2. pCAM market slows as buyers rely on long-term contracts
   Buyers in the pCAM market are well covered by long-term contract volumes with little need to dip into the spot market, particularly given the seasonal slowdown in July and August seen in China.
   

3. Chinese HPMSM operating rates rise in anticipation of demand surge
   Chinese operating rates at HPMSM processing sites rose to 33% in July as producers prepared for potential increased buying ahead of a pickup in demand in September and October. Despite this gain, utilization rates have averaged 30% January-July 2025.
   

What do our analysts say?

The battery-grade manganese market was relatively quiet through August, as typically seen during the summer months. Spot demand and liquidity have been slow with prices for ex-works mainland China manganese sulfate now rangebound since the first half of May.

Rob Searle, Fastmarkets

Key points

1. US synthetic graphite imports shift away from China amid tariffs
   US synthetic graphite imports from China are down 41% year on year in the first seven months of the year despite an overall gain of 9% in total US synthetic graphite imports in that same period. Countries such as France South Korea Spain and Indonesia were the largest beneficiaries of this shift in trade with most of the imports. Synthetic graphite remains one of the most tariff-impacted battery materials due to its lack of reciprocal tariff exemptions. This trend in US imports is likely to continue as US active anode anti-dumping tariffs impact synthetic anodes made by Chinese companies or using Chinese synthetic graphite regardless of the country it is made. 
   

2. Spherical graphite prices rise on strong anode sector demand
   Spherical graphite and synthetic precursor prices continued to make gains across the month of August with support from year-on-year growth in demand from the active anode sector in China over the first half of the year.
   

3. Flake graphite prices struggle amid weak steel demand
   Flake pricing on the other hand continues to feel the impact of lower steel demand in 2025 amid declines in Asian and European production in the first seven months of the year. Expectations among market participants are that production in China will continue to decline through the end of the year and continue to weigh on overall global production.
   

What do our analysts say?

Battery graphite prices have been making consistent gains in the last two months amid indications of strong growth in demand from the Chinese active anode sector and the focus that these markets have in US and Chinese trade tensions. Overall market participants are hopeful that the traditionally slow summer seasons starting to end will lead to increased liquidity in the markets but the overall abundance in global inventories will remain a weight on prices. 

Andrew Saucer, Fastmarkets

Key points

1. Black powder trial shipments clear Chinese customs
   Since China legalized black mass imports on August 1 the market has entered a trial phase. Companies like CRRG and CNGR have imported small cargoes—20 and 25 tonnes respectively—not to scale operations but to test regulatory procedures and logistics. Only high-quality black mass or “black powder” can be imported according to the national standard so the impact on black mass prices has so far been limited.
   

2. Recycling sector struggles with overcapacity and tight feedstock supply
   Weak recycling fundamentals with many running at losses. There is an overcapacity for shredding and refining which has caused tight supply of scrap battery and black mass feedstock. Bigger recyclers can afford to pay top prices for feedstock to keep running but mid-sized and smaller companies are running at 50% or even 30% utilization rates. The lower the capacity the worse the losses but companies will fight until the bitter end to avoid incurring greater costs from halting production.
   

3. Battery recycling faces financial strain, leading to market consolidation
   Market consolidation is expected if companies continue to run at losses. As financial pressure deepens battery recyclers are beginning to shut down or scale back operations. In North America Ascend Elements returned a $164 million DOE grant and downsized its Kentucky project while Aleon Metals filed for bankruptcy. Li-Cycle also sought bankruptcy protection putting its Rochester hub at risk. Europe has seen similar disruption: SungEel Hitech cancelled its Gera facility in Germany Ecobat is selling sites in Germany and Austria and Northvolt filed for bankruptcy.
   

What do our analysts say?

Overcapacity for recycling in comparison to feedstock availability has pushed up feedstock prices which is problematic when battery metal prices are so low and is causing a prolonged period of difficulty for many recyclers.

Julia Harty, Fastmarkets

Key points

1. Chinese EV sales strong despite BYD’s PHEV decline and adjusted target
   Chinese EV sales growth for August has remained strong but is likely being dragged down by a few factors. BYD appears to be the main large company falling victim to China’s waning enthusiasm for PHEVs, as while its BEV sales grew 34% YoY relative to last year, its PHEV sales fell a massive 23%. This trend continues to worsen for Chinese PHEV makers. August was also the second month in a row that saw BYD’s EV sales grow less than 1% YoY, as sales converged with what it saw in 2024. The company has reportedly reduced its internal 2025 sales guidance from 5.5 million to 4.6 million vehicles.
   

2. UK EV market hits record 38% penetration in August
   The UK new EV market saw a record 38% EV penetration in August as vehicles running via an electric drivetrain (BEV+PHEV+HEV) overtook petrol vehicle sales for the first time, despite HEVs losing market share relative to 2024. BEVs took 26.5% market share, up from 22.6% in August last year, while PHEVs doubled their market share from 6.8% to 11.8%.
   

3. Lyten to resume cell deliveries in Q1 2026, retains key Northvolt leadership
   Northvolt successor Lyten has announced it plans to resume cell deliveries at its newly acquired facilities from Q1 2026, allowing it to generate some revenue while it decides next steps. As part of this, it has announced changes to its European leadership team and has retained many of Northvolt’s recent additions like Matthias Arleth and Markus Danglemaier with the aim of providing continuity to employees and customers alike.
   

What do our analysts say?

EV sales remain very strong globally for the month of August, though the US and China are showing signs of weakening into the fourth quarter of this year. While the Chinese market is suffering from weakening PHEV sales weighing down unit volumes, the US faces more structural demand issues which will become apparent from October, especially once consumer subsidies have been eliminated. The silver lining is that – globally at least – the US isn’t as important to battery demand growth as China or Europe, both of which continue to go from strength to strength.

Connor Watts, Fastmarkets

Key points

1. Cell manufacturers report mixed results, ESS growth outpaces EVs
   Since August, leading cell manufacturers have been releasing their half-year and Q2 financial reports, revealing a mixed picture. Tesla and several Japanese and Korean players reported varying degrees of sales declines and losses, while Chinese companies continued their strong growth momentum. Notably, the growth rate of the ESS segment has far outpaced that of EVs across almost all manufacturers. 
   

2. Korean cell makers and Tesla boost US energy storage investments
   To counter the impact of OBBB on the US EV industry, as well as the slowdown in US EV demand, Korea’s three major cell makers—LG Energy Solution, Samsung SDI, and SK On—are ramping up their investments in the US energy storage market. At the same time, Tesla has announced plans to begin domestic production of LFP storage cells within this year. Outside of Tesla, most US-based companies remain focused on system integration, with cells still largely sourced from overseas, particularly from China.
   

3. Tesla storage fire highlights need for robust safety standards
   On August 30, a Tesla energy storage project in Monterey County, California, caught fire, once again underscoring the critical importance of safety in the energy storage sector. Thermal runaway remains one of the leading causes of fires in energy storage products. As a result, the establishment of robust safety standards has become a key focus across the industry. EU Regulation 2023/1542, which comes into full effect on August 18, 2025, requires that stationary battery energy storage systems (SBESS) be accompanied by technical documentation demonstrating their safety during operation.
   

What do our analysts say?

With the rapid growth of global energy storage demand—particularly in China, Europe, the United States, the Middle East, and Australia—the entire energy storage supply chain, from raw materials to battery cells, has seen a significant rebound in pricing. In China, for example, average cell prices have risen by around 10–15%, yet demand continues to outpace supply. Leading manufacturers are maintaining high-capacity utilization, a trend expected to persist through year-end. At the same time, Tesla and Korean cell makers are actively expanding in the North American storage market, ramping up investment in LFP cell R&D and production to counterbalance China’s overwhelming industrial scale and cost advantage, thereby ensuring a degree of independence.

Walter Zhang, Fastmarkets