Battery raw materials outlook 2025: Robust and rebalancing market

The global battery raw materials (BRM) market faces challenges and opportunities for growth in 2025, with major factors including supply and demand dynamics, lithium-ion cell costs and the future of battery recycling.  Global electric vehicle (EV) sales remain robust, and the ESS market is a standout with strong upside, while oversupplies remain in the cobalt market. 

Our webinar panel, introduced by Paul Lusty, head of battery raw materials at Fastmarkets and featuring our experts Connor Watts, Will Adams, Olivier Masson, Rob Searle, Amy Bennett, Muthu Krishna and Luke Sweeney, provided insights into all segments of the battery materials market. 

Battery demand outlook 2025

Connor Watts noted that while EV demand in Europe has fallen, we are now back into positive year-over-year growth. Elsewhere, China has been a key stalwart for EV demand with a 35% year on year increase.  

Watts said: “Some other key trends so far this year have been a continued shift towards LFP (lithium iron phosphate) batteries and extended range electric vehicles (EREVs), particularly in China.” 

“We expect EV demand to continue growing by 16% year-on-year, but the wider battery market is likely to grow much faster than that due to the development of the energy storage market,” he added. 

We expect growth in Europe next year, supported by new emissions regulations and potential positive outcomes from key elections in France and Germany. 

Lithium market looking robust

Will Adams noted that the market has rebalanced somewhat, and lithium carbonate prices have stabilized at about $11/kg with production cuts impacting supply. Cutbacks have led to significant drops in mine production in both China and Australia, but prices currently stand still at about 50% above the lows seen in 2020. 

The outlook for 2025 for lithium however is looking robust, and Adams surmised: “We’re probably going to be stepping in and out of deficits for a while, but as the deficits get closer, look out for the restocking phase as that can really give prices a boost.”  

Nickel market headed for surplus

Despite significant production cuts, the nickel market is expected to register a surplus this year, with the primary nickel demand in batteries growing by around 6% this year. According to Olivier Masson, the outlook for energy storage systems is strong, and he expects the battery sector to lead the demand for nickel in the years ahead.  

He said: “We expect crude stainless steel production to rise at a CAGR of 2.9% to 2028, driven by China and led by 300 series material, which is the high nickel containing stainless steel.” 

Cobalt prices under pressure

There are ongoing challenges in the cobalt market, where oversupply due to weak demand in Western markets and slow manufacturing growth has led to pressure on cobalt prices, according to Rob Searle. Mine supply growth has significantly outpaced demand, particularly in the Democratic Republic of Congo (DRC) and Indonesia. Searle added: “We expect to see a significant surplus in 2024, with bullish and elevated prices in the cobalt market continuing into 2025”. 

Graphite and anode market  

Amy Bennett highlighted the challenges in the graphite market, with prices falling throughout the year and significant competition from the synthetic graphite sector. China’s dominance in the graphite supply chain has increased, with Chinese producers adding and expanding capacity for both natural and synthetic graphite. The market is expected to remain in surplus next year, with some modest price recovery expected as excess supply begins to be absorbed. 

Manganese market  

Manganese sulphate prices have turned bearish in Q4, Rob Searle explained, with slow spot buying in China and the effects of weather-related mine supply disruptions in Australia. “We expect demand to grow from now and into the 2030s, driven in part by new chemistries like LMFP,” he noted. In the short to mid-term, China’s supply base looks set to fulfil global needs of high purity manganese, though there is likely to be a long-term need for a greater high purity manganese capacity. 

Cell costs and forecasts  

“Falling raw material prices have driven cell costs to historic lows,” said Muthu Krishna, adding that cell costs in China have fallen by up to 60%. He also highlighted that stable prices are critical for long-term sustainable growth in the EV sector. “LFP is well placed to absorb the rise in raw material prices, and must be adopted more aggressively outside China if we are to see the development of more affordable EVs,” he added. 

To learn more about how lithium-ion cell costs are impacting EV costs, read the in-depth report from Muthu Krishna here.

Recycling and black mass  

Finally, Luke Sweeney noted that black mass payables are generally split between Europe and the rest of the world. He highlighted that there’s a huge discount for black mass in Europe because there is almost no refining capacity within Europe, and because the European market has a different regulatory environment, with black mass considered a hazardous waste. 

Due to the global under-supply of black mass, suppliers have a strong negotiating position when it comes to price. We expect the market to become oversupplied with black mass with the rapid growth in end-of-life battery waste availability. 

If you’d like to talk to us about how you can access more insights and market intelligence relating to the BRM market, get in touch today. 

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