The global push toward a clean energy future has brought critical minerals, such as nickel, lithium, cobalt, and copper, into the spotlight. Analysts and governments alike forecast that demand for these materials will soar, powering everything from electric vehicle batteries to renewable energy infrastructure. Yet, despite these high expectations, the current reality paints a more sobering picture: prices are weak, supply is growing faster than demand, and producers are stuck in a waiting game that hinges on a yet-to-appear future boom. At the heart of this disconnect is an overarching dilemma: how should the market reconcile bold long-term demand projections with the persistent downward pressure in the present
According to Fastmarkets analyst Olivier Masson, global demand for battery metals, including lithium, graphite, cobalt, manganese, and nickel, is expected to quadruple from 3 million metric tons in 2025 to 12 million metric tons by 2035. Copper, labeled as the “bloodline” of the energy transition due to its use in electric vehicles, wind turbines, and solar panels, will require an additional 909,000 metric tons of capacity by then.
But these bullish forecasts stood in stark contrast to the mood at the recent International Critical Minerals and Metals Summit in Bali, where the industry’s attention was fixed on today’s painful realities: oversupply, falling prices, and cautious investors.
Nowhere is the imbalance more glaring than in the nickel market. Fueled by Indonesia’s aggressive industrial policy, the nickel sector has seen a flood of new capacity enter the market, resulting in a massive structural surplus. At $15,175 per ton, London Metal Exchange (LME) nickel prices are down two-thirds from their March 2022 highs and currently sit near five-year lows.
The glut isn’t limited to nickel. China’s state-supported overcapacity in refining lithium and cobalt has diluted their prices, despite their essential role in next-generation battery chemistry. Even copper, typically a bellwether for global economic health, is stuck in a holding pattern. Benchmark LME copper prices closed at $10,181.50 per ton on September 26, roughly equal to where they stood in 2021, signaling a market stuck in equilibrium.
Fastmarkets projects small copper surpluses through 2026, with only marginal shortages materializing from 2027 onward and more significant deficits forecasted around 2033–2034. But the question looms large: should companies pour capital today into new mines that may not be productive or even profitable until 2040? “The caveat to long-term forecasts is that they are inherently risky,” said Masson, reiterating that technological shifts, geopolitical tensions, and policy changes can suddenly sway supply-demand balances. Industry players must tread carefully.
Producers, especially in nickel and lithium markets, are already grappling with depressed prices and thinning profit margins. Many are being forced to scale back, minimize costs, or pause expansion projects until more favorable conditions emerge.
The current cycle bears a striking resemblance to what happened with iron ore a decade ago. Australia and Brazil ramped up iron ore production far ahead of demand, expecting China’s voracious appetite for steel to catch up. Prices subsequently collapsed, bottomed out, and only recovered when China boosted steel output to 1 billion tons annually, a level it has since sustained. Critical mineral miners are now hoping for a similar price rebound. But unlike iron ore, their markets are more fragmented and susceptible to political friction, and attempts by Western nations to decouple from Chinese supply chains may disrupt, rather than stabilize, pricing dynamics.
Global governments, particularly the United States, are now taking a more direct role in reshaping these dependencies. The Trump administration, for instance, is pioneering an equity-based industrial strategy to secure domestic strategic materials. In recent weeks, it has sought to acquire shareholdings in companies like Lithium Americas and MP Materials while signaling similar interest in the broader critical minerals sector. These interventionist approaches could provide lifelines to financially strained miners, but they also risk prolonging oversupply if not carefully timed. U.S.-backed funding could further increase global production capacity, potentially exacerbating the very price pressures it aims to address.
The geopolitical tug-of-war surrounding critical minerals adds yet another layer of complexity. Nations are racing to localize supply chains to reduce reliance on China, which dominates the refining and processing of many key materials. However, policies designed to “reshore” supply, such as export controls, subsidies, or origin restrictions, could further distort the market by promoting costlier production that may not align with global pricing dynamics.
“Efforts by Western nations to build non-Chinese supply chains may lead to increased availability, just when the market least needs it,” said Russell. “Alternatively, it could introduce duplicative, higher-cost production lines that require additional subsidies or policy measures to remain viable.”
Energy transition metals are caught in a paradox. Long-term projections remain overwhelmingly positive, yet near-term conditions tell a different story: prices are falling, supply is ample, and investor caution prevails. For now, producers must navigate a landscape of uncertainty, cutting costs, holding back expansion, and hoping that the promised surge in demand materializes before financial fatigue sets in.
Whether they emerge triumphant, much like iron ore producers eventually did, or falter in the face of structural oversupply and volatile policy shifts will depend on strategic patience, disciplined investment, and perhaps a little help from governments now willing to act more like venture capitalists than passive regulators. Until then, the critical minerals market remains stuck in limbo: balanced between dreams of green futures and the hard truths of today’s commodity cycles.