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If 2025 was a year of transition, 2026 is shaping up to be a year of volatility. The battery raw materials sector is currently standing at the intersection of shifting geopolitics, evolving technology and supply chain constraints.
In our recent Battery Raw Materials outlook webinar 2026, our team of expert analysts dove deep into the data to predict where the market is heading. Here is a look at the critical insights that every stakeholder in the battery value chain needs to know.
Policy is no longer just a background factor; it is a primary market driver. Amy Bennett, principal consultant for metals and BRM at Fastmarkets, noted, “Uncertainty was a keyword for 2025, and we expect that to continue in 2026.”
The US landscape is particularly complex. We are seeing a pivot from the Department of Energy’s focus on climate emergencies to the Department of Defense’s focus on national energy emergencies. Tariffs remain a blunt instrument used by the administration, and the “PFE” (Prohibited Foreign Entity) clauses are beginning to bite.
For businesses, this means that securing a supply chain goes beyond economics to include compliance and national security. The Supreme Court’s impending decision on the legality of certain tariffs could also reshape the import landscape overnight.
The demand story is splitting into two distinct narratives.
While electric vehicle adoption continues, the explosive growth of previous years is tempering. In China, the removal of EVs from the five-year plan signals a shift from raw volume to quality and sustainability. In the US, the removal of subsidies has dampened demand.
However, 2026 will be the “year of onshoring” for Europe, as Chinese heavyweights like CATL and BYD ramp up local production facilities to bypass trade barriers.
Contrast this with the Energy Storage Systems (ESS) market, which is entering 2026 on very strong footing. The surprise driver here is clear: Artificial Intelligence.
“AI workloads require reliable power supply, creating a fast-growing use case for ESS,” explained Walter Zhang, Fastmarkets senior analyst covering ESS.
LFP (Lithium Iron Phosphate) chemistry continues to dominate this space due to its cost and safety profile, holding over 90% of the market share.
Perhaps the most urgent news comes from the upstream sector, where supply/demand balances are tightening.
After a period of falling prices, cobalt is roaring back. The Democratic Republic of Congo (DRC) has implemented an export quota system that is severely restricting flow.
“The constrained availability of feed this year and next is likely to pull the market into a deficit, something we hadn’t seen for a while,” noted Olivier.
Prices have already doubled, and if this squeeze continues, we may see OEMs accelerating their shift toward low-cobalt or cobalt-free chemistries to avoid the volatility.
Lithium is also seeing a rebound. Maintenance outages and supply cuts have helped balance the market. We are forecasting a balanced market or small surplus for 2026/2027, supported by that accelerating ESS demand.
The era of predictable supply chains is behind us. To succeed in 2026, organizations need to:
To get the full data breakdown and more detailed analysis into the forecast for BRM in 2026, you can download the recording of the webinar here.