Battery Metals Rebound in 2026: Lithium, Cobalt and Nickel Climb Off Multi-Year Lows
The battery metals bust is over. Prices for lithium, cobalt and nickel have all climbed back from the lows they hit across 2024 and 2025, Reuters metals columnist Andy Home wrote on July 1. The recovery has been uneven, and it has been powered less by a surge in car sales than by tight supply and a fresh wave of grid-scale storage.
For two years, cell makers enjoyed cheap raw materials. That window has closed. Lithium spot prices have more than doubled from their 2025 lows and now trade above $20 per kilogram, CME Group metals director Gregor Spilker reported on June 15. Cobalt has recovered from around $10 a pound to above $25. Nickel, hammered through 2024, has also firmed.
The rebound is a headache for anyone building a battery. Higher metal costs pass straight into cell prices, and analysts warn that a further climb could stall the demand that is lifting prices in the first place.
Supply curbs did the heavy lifting
This rally was built on restraint, not a boom in orders. The Democratic Republic of Congo, the world's top cobalt producer, has capped outbound shipments at roughly 96,600 metric tons a year for 2026 and 2027. That is close to half its peak 2024 output. The DRC supplies 70 percent or more of global cobalt, so the cut is felt everywhere.
Indonesia, which dominates nickel supply, used quotas to rein in a mining sector that had expanded too fast. China, the center of lithium processing, suspended its giant Jianxiawo mine. Two years of rock-bottom prices had already forced higher-cost producers — Chinese lepidolite operations among them — to cut output and delay spending.
Mines take time to restart. It can take over a decade to move a newly found resource into commercial production, Spilker noted. Capital pulled during the 2024-2025 trough will not return overnight, which limits how fast supply can respond now.
The numbers behind the climb
Cobalt demand shows a bigger and more varied market. In 2022, total cobalt demand sat at 187,000 metric tons, with batteries taking just over 70 percent. By 2026, demand reached 276,000 metric tons — up 48 percent — and batteries now account for 75 percent, CME Group figures citing the Cobalt Institute show.
Lithium's swing was wider. Total demand ran near 0.8 million metric tons of lithium carbonate equivalent in 2022. By 2025 it reached about 1.4 million — a 75 percent jump. Batteries make up roughly 90 percent of lithium demand today. Global passenger EV sales topped 20 million units in 2025, a floor for material use that did not exist at the last cycle's peak.
Storage stepped in where cars slowed
Battery storage has become the swing buyer. Grid-scale installations have grown more than 20-fold in five years and accounted for 15 percent of battery demand in 2025, the IEA reports. China is midway through a plan to more than double its new energy storage capacity to 180 gigawatts by 2027.
The United States set a quarterly record in the first three months of 2026. The country installed 9.7 gigawatt-hours of battery storage, up 32 percent from a year earlier, the Solar Energy Industries Association said in May. SEIA projects 613 GWh of cumulative deployment by 2030, lifted by data-center demand.
Most of that storage runs on lithium-iron-phosphate chemistry, which carries neither cobalt nor nickel. LFP took a 50 percent share across batteries, the IEA said. That helps lithium but leaves cobalt and nickel exposed as car demand wobbles. For more on how cell chemistries stack up, see our Battery Tech explainer and our EV coverage.
A bumpy road for car demand
Car sales, the old engine of battery metals, hit a rough patch in 2026. After growing 20 percent year-on-year in 2025, global EV sales rose just 0.9 percent in the first five months of 2026, consultancy Benchmark Mineral Intelligence found. North America fell 25 percent, hit by the removal of U.S. tax credits in September. China, the largest market, contracted 15 percent over the same stretch. Europe grew 26 percent, and the rest of the world jumped 89 percent on Chinese exports.
That split matters. A shift toward larger vehicles and LFP packs cushioned part of the blow, but the headline growth rate flattened. Metals deployed per passenger EV tell the same tale: lithium per battery rose 7 percent year-on-year in April as packs grew, yet average cobalt and nickel use held flat, Adamas Intelligence data cited by Reuters showed.
The risk of demand destruction
Higher prices can eat their own cause. Lithium carbonate has risen nearly threefold since the middle of last year, Home wrote. Analysts at Project Blue estimate current pricing has reached break-even for some grid-storage projects, and they warn that "the risk of demand destruction grows if prices keep rising."
That ceiling is why this cycle may not repeat the 2022 spike. Back then, cobalt peaked in May 2022 and lithium in December 2022 on acute scarcity fears. Today the floor is firmer — 20 million EVs a year and a fast-growing storage market — but the roof is closer, because buyers can shrink packs or walk away.
Hedging enters the toolkit
One change since the last peak is how the industry manages price risk. CME Group's battery-metals suite — cobalt, lithium hydroxide, lithium carbonate and spodumene futures — has drawn real liquidity. Cobalt futures traded about 35 contracts a day at the 2022 top; by April 2026 that was 159 contracts a day with open interest above 14,000. Lithium hydroxide futures now trade roughly 449 contracts a day with open interest over 15,000.
Producers and users are using those contracts to lock in prices, Spilker said, shifting from a market that once left automakers and miners fully exposed to spot swings. That will not stop the cycle, but it can soften the next crash.
For now, the metals that power the energy transition are expensive again. Whether they stay there depends on mines that take years to build and on storage builders who may stop buying if costs run too high.
Sources: Reuters, CME Group, Utility Dive / SEIA, IEA.