The African Export-Import Bank (Afreximbank) has revealed that the global critical minerals market is experiencing a paradox, booming demand fueled by the electric vehicle (EV) revolution, battery storage expansion, and global grid modernisation, yet a market slump as supply growth outpaces consumption.
According to the bank’s latest market outlook, Indonesia’s aggressive nickel production, China’s dominance in lithium and graphite processing, and Africa’s rising output, particularly cobalt from the Democratic Republic of Congo (DRC) and lithium from Zimbabwe, have tipped the scales, triggering a price downturn across the sector.
Lithium Prices Plummet
Lithium spot carbonate prices have nosedived by about 85% from their January 2023 peak of $71,000 per tonne to just $9,600 in August 2025. A brief rebound followed after a CATL-linked mine in China suspended operations, but the global surplus continues to weigh heavily on the market.
Nickel Glut Persists
Indonesia’s massive growth in nickel pig iron and ferronickel production has deepened oversupply. With Asian demand slowing, prices are expected to remain under pressure well into 2025.
Cobalt and Graphite Under Pressure
Cobalt prices hit multi-year lows in 2024 due to oversupply, though a temporary export ban in the DRC briefly spiked prices in 2025. Graphite markets are being reshaped by China’s new export permit rules and a proposed 93.5% US anti-dumping tariff on Chinese anode materials, disrupting trade flows and raising procurement costs for global buyers.
The International Energy Agency (IEA) warns that any sustained supply disruption in battery metals could push average battery pack prices up by as much as 40–50%, underscoring how geopolitical and policy shifts can send shockwaves through the sector.
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Africa’s Strategic Window
For African producers, the current low-price environment is a double-edged sword, squeezing export revenues in the short term but offering a golden opportunity to prepare for the next price upswing. Afreximbank urges African nations to invest in domestic refining and processing plants to capture more value, diversify export markets beyond a few key destinations, and leverage the African Continental Free Trade Area (AfCFTA) to boost intra-African trade in refined minerals and battery components.
Market Outlook
The 2025/2026 market remains buyer-friendly, but volatility looms. A rapid demand spike, slower project rollouts, or tightening geopolitical trade policies could quickly reverse the trend. Analysts predict that while oversupply dominates now, the next cycle could see a sharp rebound and those who position strategically today could emerge as the industry’s big winners.
