Nickel, cobalt and lithium prices rise
Electric vehicles have massive impact on raw materials market
Marcus Stuart (MS)May 9, 2025
Rising EV sales have sparked a race for nickel, cobalt and lithium that has pushed battery material prices to multi-year highs
The phasing out of internal combustion engine vehicles (ICE (NYSE:ICE)) in favor of electric vehicles is part of the energy transition and efforts to reduce carbon emissions.
Data from Rho Motion shows that more than 6.36 million electric vehicles were sold worldwide last year, up from 3.10 million in 2020. China accounted for half of that last year, up from 40% the year before. NICKEL
Nickel shortages have led to depletion of stocks in London Metal Exchange-registered stockpiles, which have fallen by 65% to 88,182 tonnes since April last year.
Even more relevant are stocks of bagged briquettes, which can be easily crushed into small particles and dissolved in sulfuric acid to make nickel sulphate for batteries, down 67% at 65,676 tonnes since April last year.
According to analysts, most of these briquettes were shipped to China, which controls the electric vehicle supply chain.
Wood Mackenzie analyst Andrew Mitchell estimates total demand for nickel at 2.8 million tonnes last year, of which 69% was used to make stainless steel and 11% to make batteries, versus 71% and 7% in the US, respectively year 2020.
Mitchell expects batteries to account for 13% of nickel demand this year. "We expect higher average prices this year."
Nickel hit $24,435 a tonne last week, its highest level since August 2011. The price is expected to decline throughout the year as supply increases.
Macquarie's Jim Lennon expects nickel supply to rise 14.5% this year to three million tonnes, with a surplus of 43,000 tonnes from a deficit of 159,000 tonnes in 2021.
COBALT
Coronavirus lockdowns in southern Africa created shortages that delayed shipments to China from the DRC, which accounts for more than 70% of global shipments.
"Chinese cobalt hydroxide imports increased by just 2.5% last year to 82,100 tonnes compared to 2020, meaning domestic stocks have been significantly depleted," said Benchmark Mineral Intelligence (BMI) analyst Caspar Rawles.
BMI expects total demand for cobalt this year to be 177,500 tonnes, of which 104,000 tonnes will be in the battery sector.
Cobalt prices are around $70,000 per tonne, the highest since July 2018. Traders are expecting further gains as Chinese consumers start to stock up again.
LITHIUM
Deficits have pushed lithium carbonate prices in China to a record high of over $50,000 a ton, according to BMI.
Lithium carbonate is used in lithium iron phosphate (LFP) batteries. Sales of electric vehicles using these batteries have increased in China.
A lack of investment in capacity due to falling prices in the three years to 2021 means that deficits can be expected for a number of years.
"With long lead times to bring first production from lithium deposits to market, supply is struggling to keep up with demand," said BMI analyst George Miller.
Electric vehicle batteries may contain lithium carbonate or lithium hydroxide. The industry typically speaks of Lithium Carbonate Equivalent (LCE), which includes both.
BMI estimates demand for lithium carbonate equivalent at 610,000 tonnes this year, up from 490,000 tonnes last year, and a deficit of 26,000 tonnes from a deficit of 12,000 tonnes.
