Highlights

  • Benchmark Mineral Intelligence's Adam Webb says energy storage systems drove the lithium market into Deficit this year, lifting prices from last year's lows.
  • Supply policies in the Democratic Republic of Congo and Indonesia are reshaping the cobalt and nickel markets respectively.
  • Graphite remains in surplus as East African output ramps up, while battery cell production continues to outpace demand, mainly in China.

Battery metals have been among the most volatile segments of the resources sector in recent years, and Australia, as a major lithium producer with growing interest in nickel, cobalt and graphite, is closely exposed to the cycle. Within the broader universe of Metal and Mining Stocks on the ASX, fresh perspective on the market has come from Adam Webb, Head of Battery Raw Materials at price reporting and research agency Benchmark Mineral Intelligence. In an interview published this week, Webb outlined how battery energy storage systems have become a major driver of demand, how government policies in key producing nations are shaping supply, and where the main risks lie. His comments offer useful context for Australian readers seeking to understand the forces behind recent movements in battery raw materials markets, from lithium and cobalt through to nickel, graphite and phosphate-based materials.

Electric Vehicle Demand Shows a Mixed Regional Picture

Webb said global electric vehicle sales were expected to grow this year, but at a more moderate pace and with clear regional differences. China's market has flattened, North American growth has slowed, and Europe has recorded an increase.

This uneven picture matters because electric vehicles have historically been the dominant source of battery demand. A slower and more regionally fragmented vehicle market places greater emphasis on other demand sources, particularly stationary storage. Energy storage projects are typically linked to grid stability and renewable energy integration, which gives them a different demand profile from consumer vehicle uptake.

Lithium Moves Into Deficit on Energy Storage Growth

According to Webb, the lithium market moved into deficit this year, driven mainly by rapid growth in battery energy storage system deployments. Demand growth outpaced Supply growth, and Benchmark's assessment is that this imbalance contributed to a substantial recovery in lithium carbonate prices from the lows of last year.

He described a more recent pullback in prices as largely sentiment-driven. Over the longer term, Benchmark expects lithium demand to rise considerably towards the end of the next decade. For Australia, which hosts many of the world's hard rock lithium operations, the role of energy storage as a demand driver is a notable shift in the market's structure.

Policy Shapes Cobalt and Nickel Supply

The Democratic Republic of Congo, which produces the majority of the world's cobalt, imposed an export ban and then moved to a Quota system. Webb said this contributed to a sharp increase in cobalt hydroxide prices, while cobalt-containing battery demand is still expected to grow this year.

In nickel, Indonesia is the dominant supplier, and its mining quota under the RKAB approval system was lower than in the prior year and below what smelters required. Webb said the market had moved into a narrow deficit, and he linked the closure of a Canadian refinery at Fort Saskatchewan to United States sanctions affecting Cuban supply. These developments illustrate how policy decisions in a handful of countries can shift global balances.

Graphite, Phosphoric Acid and Cell Overcapacity

Graphite presents a different picture. Batteries account for a significant portion of graphite demand and China dominates supply, but Webb said rising output from East Africa had left the market in surplus, with flake graphite prices broadly stable.

Purified phosphoric acid, used in lithium iron phosphate cathodes, was described as being in deficit, with China a major supplier and Morocco holding a large share of global phosphate reserves. Meanwhile, battery cell production this year is expected to exceed demand, with the oversupply concentrated in China's energy storage segment. Excess cell capacity can put pressure on battery prices, which in turn may influence how much Downstream manufacturers are prepared to pay for raw materials.

Risks Facing the Battery Metals Outlook

Webb identified several risks, including the pace of electric vehicle adoption and energy storage rollouts, the potential for Chinese overproduction, and the possibility that sodium-ion batteries could displace some lithium-ion demand.

These factors could influence prices and project decisions across the supply chain. For Australian producers and developers, they underline the importance of cost competitiveness, product quality and diversified offtake relationships in a market shaped by policy and technology change. Exposure to concentrated supply chains also remains a consideration for policymakers in importing nations.

Key Takeaways for Australian Readers

Benchmark Mineral Intelligence's assessment points to energy storage emerging as a central driver of battery metals demand, with lithium moving into deficit and supply policies in Congo and Indonesia reshaping cobalt and nickel. Graphite remains in surplus and cell overcapacity persists in China. For readers following Australia's battery minerals sector, the analysis highlights how demand sources, government policy and technology risks continue to shape conditions across the industry.