Battery & Critical Materials
Lithium, cobalt, uranium, rare earths: the materials of electrification and energy security.
The New Strategic Commodities
Young markets, priced in the dark
Lithium, cobalt, uranium, and the rare earths are the youngest markets in this handbook, and the strangest. None of them trades the way oil or copper trades. There is no deep central exchange where physical supply and demand meet in a continuous public auction. Most volume moves under long-term bilateral contracts between miners and industrial buyers, negotiated privately and never disclosed. The visible price, the one quoted in headlines, is usually an assessment: a price reporting agency such as Fastmarkets, Benchmark Mineral Intelligence, UxC, Asian Metal, or Shanghai Metals Market surveys traders and producers, applies a methodology, and publishes its best estimate of where a thinly traded spot market cleared that day or that week.
That structure has consequences. Assessed prices can gap violently when a handful of spot cargoes change hands in a panic, because there is no order book absorbing the flow. Transparency is poor, positioning data barely exists, and a single large buyer or seller can move the published number. These are commodity markets in roughly the condition oil was in during the 1970s: strategically vital, physically enormous, and financially immature.
Futures grafted onto assessments
The financial layer is being built on top of the assessments rather than replacing them. CME Group launched cash-settled cobalt metal futures in December 2020 and cash-settled lithium hydroxide futures in May 2021, both settling against Fastmarkets assessments, and added lithium carbonate futures in 2023. Nobody delivers a tonne of lithium hydroxide against these contracts; they simply pay or receive the difference against the published assessment, exactly the way Asian LNG derivatives settle against the Platts JKM assessment. Open interest started near zero and has grown steadily as automakers, battery makers, and miners discovered they needed to hedge a price that could move 90 percent in a year.
Uranium followed the same template earliest of all: NYMEX listed cash-settled uranium futures in 2007, settling against the UxC spot U3O8 price indicator. Guangzhou Futures Exchange went further in July 2023 and listed a physically deliverable lithium carbonate contract that quickly became the most liquid lithium instrument in the world, another reminder that the center of gravity in these markets sits in China.
China owns the middle of every supply chain
The defining structural fact of this group is that China dominates processing far more than it dominates mining. China mines roughly 20 percent of the world's lithium but refines roughly two thirds of it. It mines very little cobalt but refines roughly three quarters of global supply. It mines roughly 70 percent of rare earths but performs roughly 90 percent of separation and refining and makes roughly 90 percent of the world's sintered neodymium magnets. For graphite anode material the processing share is higher still. Ore can come out of the ground in Australia, Chile, or the Democratic Republic of the Congo, but on its way to a battery or a magnet it almost always passes through a Chinese chemical plant.
That chokehold was built deliberately over two decades through cheap capital, tolerant environmental policy, and state-backed buildout of conversion capacity that western firms judged uneconomic. It means the strategic question in these markets is rarely "is there enough rock" and almost always "who controls the conversion step".
Export controls are the new OPEC
Where OPEC manages oil supply with production quotas, the critical materials era is managed with export controls and license regimes. In July 2023 China imposed export licensing on gallium and germanium, followed by graphite later that year, and in December 2024 it banned gallium, germanium, and antimony exports to the United States outright. In April 2025 it placed seven medium and heavy rare earths and finished magnets under export licensing in response to US tariffs, briefly halting magnet shipments and idling western auto plants, then expanded the regime in October 2025, an expansion it suspended for one year in November 2025 as part of a trade truce with Washington. The Democratic Republic of the Congo suspended cobalt exports in February 2025 and converted the suspension into a quota system, an explicitly OPEC-style move by a country supplying roughly three quarters of the world's mine output.
On the demand side, governments have become structural buyers. Offtake agreements, once a quiet financing tool, are now policy instruments: automakers prepay miners years ahead of production, and defense ministries stockpile. Japan has stockpiled rare earths through JOGMEC since the 2010 embargo scare; the US Defense Department holds critical materials in the National Defense Stockpile and in 2025 took a direct equity stake in MP Materials with a guaranteed price floor for NdPr oxide.
The western response
The policy reaction since 2022 has been the largest industrial-policy push in the West since the Cold War. The US Inflation Reduction Act of August 2022 tied electric vehicle tax credits to battery materials sourced domestically or from free-trade partners, and labeled "foreign entities of concern" out of the subsidy. The US, the EU (through the Critical Raw Materials Act of 2024), Japan, Australia, and Canada all maintain official critical minerals lists that unlock fast-track permitting and public finance. Washington has used Section 232 national-security investigations, tariffs, price floors, and direct equity to pull processing capacity onshore, and in May 2024 banned imports of Russian enriched uranium.
The honest summary for a trader: these markets are small, thin, policy-driven, and capable of moving multiples in either direction. They reward supply-chain knowledge over chart-reading, and they punish anyone who assumes the liquidity of oil.
Fact Sheets
The lightest metal rode an 80,000-dollar rocket up in 2022 and a 90 percent crash back down, all before most of the world learned how it was priced.
Three quarters of the world's cobalt comes out of one country, and in 2025 that country discovered it could behave like OPEC.
After a decade in the wilderness following Fukushima, uranium tripled in three years because hedge funds, utilities, and AI data centers all wanted the same pounds.
Seventeen elements nobody can pronounce, refined almost entirely in one country, sitting inside every motor, missile, and wind turbine the other countries want to build.