• Congo’s cobalt embargo and China’s rare earth restrictions pushed prices up sharply.
• Lithium and graphite prices continued to fall amid oversupply and delayed production.
• Manganese prices rose but face a mixed outlook as demand for batteries grows.

As the first half of 2025 came to a close, metal prices diverged sharply—some were lifted by geopolitical restrictions, others dragged down by global oversupply. This second segment in our series on battery minerals (following the copper and nickel analysis) focuses on cobalt, lithium, rare earths, graphite, and manganese.

Prices for critical battery metals remain highly sensitive to policy decisions from dominant producers. Cobalt and rare earths saw sharp gains in early 2025, driven by export restrictions from the Democratic Republic of Congo (DRC) and China. In contrast, lithium and graphite continued to underperform due to persistent supply gluts.

Cobalt: DRC’s Embargo Sparks a Rebound

Cobalt prices rose sharply—about 40%—on the London Metal Exchange during the first half of 2025, reaching over $35,000 per tonne in March, levels not seen since early 2023. This spike was driven by a February export embargo imposed by the DRC, the dominant supplier holding nearly 70% of global cobalt output. Initially a three-month ban, the embargo has been extended through September 2025 as Congolese authorities seek to protect the value of this crucial commodity.

The price increase reverses a long decline caused by oversupply from Congolese mines and Indonesian production growth. While the DRC government cites high global inventories to justify the embargo extension, supply tensions may arise by the end of 2026 if restrictions persist. Officials are weighing whether to fully lift the embargo or adopt export quotas as a new policy.

Rare earths: Chinese retaliation and soaring prices

While not as drastic as full embargoes, China's restrictions in the first half of 2025 had a significant impact on rare earth markets, sending prices sharply upward. In response to mounting trade tensions with Washington, Beijing announced in early April a new set of curbs targeting seven categories of rare earth elements—among them, dysprosium and terbium.

The measures include selective export bans, restrictions on Chinese companies trading with U.S. firms, and a slow-moving export license system that can delay shipments for months. As a result, European benchmark prices for dysprosium tripled by early May, reaching $850 per kilogram. Terbium followed a similar trend, soaring from $965 to $3,000 per kilogram, according to Argus Media.

According to the World Bank’s April 2025 Commodity Market Outlook, the spike in rare earth prices reflects growing anxiety over China’s tightened controls on exports of key materials used in clean energy and military applications, a move seen as a direct response to escalating U.S. tariffs.

These sharp price movements reveal the fragile equilibrium of a rare earths market worth only $4 billion in 2024—far smaller than lithium ($28 billion) or cobalt ($17 billion), according to Grand View Research. The sector is not only geographically concentrated but also fragmented by the wide range of elements and their distinct industrial uses.

This complexity makes it difficult to draw clear conclusions or long-term forecasts. In response, Western governments—especially the United States—are trying to reduce their dependence on China by offering local producers competitive rates and introducing minimum pricing policies. Even so, the International Energy Agency (IEA) projects that China’s dominance in rare earth refining will decline only modestly, from 91% today to 73% by 2040.

Lithium prices continue to fall

The decline in lithium prices has shown little sign of slowing. According to the International Energy Agency (IEA), prices dropped by 80% between 2023 and 2024. This downward trend continued into the first half of 2025, with the Shanghai Metal Market reporting a 32% year-on-year fall in battery-grade lithium carbonate. In February, prices fell below $9,550 per tonne—marking their lowest point since 2021.

The primary factor behind this slide is a supply surplus. Between 2021 and 2024, global lithium supply expanded by more than 30%, slightly outpacing the corresponding growth in demand. This imbalance has weighed heavily on market prices.

Unlike cobalt, lithium's global supply is less centralized. A growing number of emerging players are reshaping the landscape. According to the IEA, lithium stands out from other critical minerals because a significant share of the recent supply growth has come from emerging producers like Argentina and Zimbabwe, rather than traditional heavyweights. The agency expects this diversification to continue and predicts that supply will likely exceed demand until the late 2020s, before demand overtakes supply and the market tightens.

Some experts suggest a price rebound will be necessary to sustain production. Adam Webb, head of battery raw materials at Benchmark, asserts that the long-term incentive price for lithium is $21,000 per tonne.

Graphite and manganese

Graphite is another critical material facing a price decline due to excess supply. From 2021 to 2024, graphite supply increased by nearly 15%, while demand rose by less than 10%. This mismatch triggered a 20% price drop in 2024, according to the IEA, following a 33% decline in 2023, as reported by Fastmarkets. The downward trajectory has persisted into the first half of 2025, with producers outside China particularly impacted as low prices threaten their margins.

This environment has caused delays in new mining projects. Since 2023, Syrah Resources in Mozambique has limited its operations to intermittent production campaigns, while NextSource Materials has struggled to scale commercial output at the Molo mine in Madagascar.

Manganese, though not officially classified as a critical mineral, is gaining traction in the clean energy sector. According to the IEA, manganese usage in batteries is increasing rapidly due to its significance in essential chemical compounds found in electric vehicle cathodes—specifically lithium-nickel-manganese-cobalt oxide and the newer lithium-iron-manganese phosphate.

Prices for manganese surged in late 2024 due to supply disruptions in Australia and Gabon, along with rising demand. France’s Eramet, the world’s top manganese producer, reported a 13% increase in the manganese ore price index, reaching 44% quarter-on-quarter in Q1 2025 and trading at $4.6 per dry tonne unit (dmtu).

Looking ahead, the market outlook remains mixed. While global steel output is expected to stay flat in 2025—offering limited support—analysts warn that investment in battery-grade manganese production isn’t keeping pace. According to ChemAnalyst, the market should remain balanced or slightly oversupplied until 2026, before moving into a potential deficit later in the decade, which would likely drive prices higher again.

Emiliano Tossou