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The North American battery recycling sector approaches the Las Vegas conference after another bruising twelve months of supply challenges and bankruptcies.
Since the previous Fastmarkets showpiece in Sin City, Quebec-based Lithion Technologies entered creditor protection in November 2025, while Massachusetts-headquartered Ascend Elements filed for Chapter 11 bankruptcy in April of this year.
Fellow Canadian recycling company Li-Cycle, which operates facilities in the United States, was acquired by trading behemoth Glencore after the former had filed for bankruptcy protection in May 2025.
Cuts to funding for US recycling companies through Department of Energy (DOE) grants during Donald Trump’s second term as president, together with a fall in private investments amid lower battery metals prices, have challenged North American recyclers, according to market sources.
Recycling companies have failed “not because there was anything wrong with the company. It’s maybe they couldn’t hold their breath underwater that long,” Matt Cooper, vice president of business development at Singapore-based recycler Green Li-ion, said.
Supply of US black mass has also reduced of late, Fastmarkets heard. “The volume probably peaked in the third or fourth quarter of 2025 and has significantly declined in 2026 due to feedstock availability challenge,” a producer source said.
At the same time, payables for NCM black mass have risen sharply in the US this year, due to higher lithium prices spurring stronger buying demand into South Korea and China, with the latter nation legalising black mass imports under strict rules from August 2025.
Fastmarkets’ price assessments of the black mass, NCM/NCA, payable indicator, nickel, max 5% moisture, exw USA, % payable LME Nickel cash official price and of the black mass, NCM/NCA, payable indicator, cobalt, max 5% moisture, exw USA, % payable Fastmarkets’ standard-grade cobalt price (low-end) were both 104-109% on Wednesday June 10, up sharply from 72-77% year on year.
Despite these challenges in the recycling sector, US critical minerals market participants are determined to develop an independent North American supply chain, a prospect many are optimistic about, driven by rising demand and government support through both policy and investment.
Federal government support has empowered recent supply chain developments through specific involvement such as the US Department of Energy’s partnership on FAST-41 transparency projects to new funding announcements for the critical minerals sector more broadly.
These investments are particularly well-timed given rising demand and tight supply for lithium and other battery materials, Ian Rodger, CEO of the newly formed lithium development company US Elemental, told Fastmarkets in May.
State and local government support have been essential as well, such as in California’s Lithium Valley hub, an “integrated ecosystem” of public and private investment and collaboration that will be explored in detail during a dedicated conference panel.
Demand and the government have lent support to development further into the supply chain as well. Refiner Nth Cycle cited these same factors when it announced two planned expansions and a binding offtake agreement in March.
As announcements about offtake agreements and development projects keep coming, participants continue to emphasize the need to build a strong, independent North American supply chain.
Despite the favorable tailwinds and unified focus, some market players note that a domestic supply chain will take time to develop and scale, and steadily growing demand may exacerbate tight supply and global dependence in the meantime.
Fastmarkets’ weekly assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp US and Canada was $22.00-26.00 per kg on Thursday June 18, roughly double the assessment of $11.60-13.00 per kg on June 20, 2025.
South Korea’s leading battery manufacturers are accelerating a strategic shift toward the energy storage systems (ESS) market in 2026 amid strong growth prospects for the ESS market, while slowing electric vehicle (EV) demand weighs on their core battery businesses.
ESS has emerged as a key growth area for lithium demand, while a surge in AI data centers and power grid infrastructure expansion has driven strong growth prospects for the ESS sector since the second half of last year.
According to Fastmarkets’ research, LFP batteries are expected to account for 95.1% of ESS deployments in 2026.
LG Energy Solution (LGES) identified ESS expansion as a core strategic focus for 2026. The company planned to increase its global ESS production capacity to more than 60 gigawatt-hours (GWh) this year, with over 80% located in North America, by repurposing existing EV battery lines toward ESS battery manufacturing.
Samsung SDI and SK On have taken similar steps.
Samsung was converting part of its joint plant facilities with Stellantis in Indiana from EV battery into ESS lines, targeting up to 30GWh of ESS output, the company said at earnings calls in late 2025.
During this March, Samsung secured a 1.5 trillion Korean won deal to supply ESS batteries to a US energy company from 2026 to 2029. The batteries will be produced at their Indiana, US, plant.
SK On has been repurposing its existing EV battery production lines at its Georgia plant to make LFP batteries from the end of 2025, following a supply agreement with US ESS developer Flatiron Energy.
The pivot towards the ESS sector among South Korean battery makers was accelerated by the slowdown in EV demand in Western markets, particularly dampened by policy changes in key markets.
For example, SK Innovation reported an operating loss of KRW 931.9 billion for its battery business in the full year of 2025. The company attributed the weaker performance to reduced sales following the discontinuation of EV purchase subsidies in the US, as well as inventory adjustments by North American customers and year-end shutdowns at automotive plants.
The US Inflation Reduction Act provided tax credits of up to $7,500 for eligible EV purchases, but these incentives expired on September 30, 2025. This has reduced EV uptake in the US and weakened battery demand for South Korean manufacturers, market participants said.
Fastmarkets’ daily assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $22.00-22.50 per kg on Friday June 12, up by $0.50-1.00 per kg from $21.00-22.00 per kg a day earlier.
Fastmarkets’ daily assessment of lithium hydroxide monohydrate LiOH.H2O 56.5% LiOH min, battery grade, spot price cif China, Japan & Korea was $20.00-22.00 per kg on Friday, narrowing upward by $0.50 per kg from $19.50-22.00 per kg a day earlier.
Interested in prices, news and analysis for the commodities used in EV and ESS batteries? Discover Fastmarkets’ battery raw materials suite.
Europe entered 2026 still pursuing one of the most ambitious battery supply-chain strategies outside China. Policymakers, automakers and investors have spent years attempting to build a domestic ecosystem spanning lithium mining, refining, cathode production, cell manufacturing and recycling, driven by concerns over strategic dependence on Asian supply chains.
But progress this year has highlighted the difficulty of translating political ambition into commercial success.
Several high-profile setbacks exposed the structural challenges facing Europe’s battery industry.
After Swedish battery manufacturer Northvolt filed for insolvency in 2025, Norwegian cell producer Morrow Batteries entered bankruptcy proceedings and French lithium refiner Viridian Lithium was placed into judicial liquidation this year.
Together, the failures reinforced concerns from market sources that many projects launched during the peak of EV optimism between 2020 and 2022 were struggling to compete in a market now characterized by slower demand growth, tighter financing conditions and aggressive Chinese competition.
The challenge extends beyond individual companies. Market participants continue to point to Europe’s structural disadvantages compared with China, including higher energy, labour, land and capital costs, as well as longer permitting timelines and greater regulatory complexity.
And while China spent decades building integrated supply chains across mining, chemicals, cathode materials and battery manufacturing, Europe has been attempting to develop much of that ecosystem simultaneously.
This year has also underscored the challenge of establishing a fully localized battery materials supply chain. The suspension of Rio Tinto’s Jadar lithium project in Serbia late last year removed one of the few potential sources of lithium raw material capable of supplying Europe at a meaningful scale, while ongoing permitting challenges, local opposition and financing constraints continue to limit domestic mining growth. As a result, Europe remains heavily dependent on imported lithium feedstocks and Chinese-dominated precursor supply chains.
Perhaps most strikingly, some of the strongest progress this year has come not from European companies but from Asian investors. Chinese-backed projects, including battery manufacturing investments from CATL and BYD, have largely remained on schedule despite broader uncertainty across the region.
Industry participants increasingly view these projects as providing some of the clearest support for future European lithium demand growth, highlighting the extent to which Europe continues to rely on foreign expertise, capital and technology to advance its battery ambitions.
The European Union and national governments have taken increasingly active steps to support the sector. The European Commission announced a €1.5 billion Battery Booster Strategy to accelerate domestic cell manufacturing, while France took the unusual step of acquiring a direct stake in Imerys’ Emili lithium project, signaling a greater willingness by governments to intervene financially in strategic raw-material developments.
Europe also achieved a milestone with the start-up of Finland’s Keliber project, the continent’s first fully integrated battery-grade lithium production system.
Additional progress has emerged through refining partnerships, offtake agreements and recycling initiatives, while the EU’s battery and critical minerals policies continue to provide a framework for investment. Yet many participants argue that financing support alone will not resolve Europe’s competitiveness challenge.
South America holds more than 50% of global lithium resources, making it a key player in the global lithium landscape. The region is expected to serve as a strategic supplier to both Western and Asian markets.
According to Fastmarkets’ Research team, South America’s share of global supply is forecast to remain stable at 27% in both 2026 and 2036. This outlook is supported by high-quality assets in the Lithium Triangle, despite longer construction and ramp-up periods for brine projects compared with hard rock operations.
The region is widely recognized for its low-cost lithium production. However, individual countries and companies face distinct conditions that shape their opportunities and challenges.
Overall, three key factors are influencing supply from South America.
The first is the shifting political landscape, with recent government changes in Chile and Bolivia and upcoming elections in Brazil (2026) and Argentina (2027).
The second is foreign investment and offtake agreements, which face challenges such as government intervention, unclear licensing rules, regulatory fragmentation, and limited access to funding.
The third key factor is position in the cost curve. While integrated brine operations remain competitive, they are affected by higher royalty burdens and, in some cases, less favorable evaporation conditions.
In Brazil, where production is based on hard rock, the market has been monitoring the restart of mining activities at Sigma since February 2026. The company said it aimed for a controlled ramp-up during the first quarter.
Additional reporting by Zihao Li
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