Suppliers to China’s electric vehicle (EV) battery makers are seeking higher prices for key cobalt-based materials following a surge in cobalt prices and a tightening market for essential inputs, according to a Reuters report.
Producers of nickel-manganese-cobalt (NCM) precursors, the feedstock used to manufacture cathodes for NCM batteries, which power around a fifth of Chinese EVs, have recently pushed for higher offers on long-term contracts, today’s report said.
NCM precursors are typically sold at a discount of about 10 per cent to spot cobalt sulphate prices in China. However, producers are now aiming to narrow that discount to about 5 per cent, with some also seeking to reduce discounts on spot orders next year.
The move marks the first major price push in nearly two years and comes amid a strong recovery in cobalt markets. Prices for the metal have more than doubled in 2025, climbing to around US$24 per pound from US$10 earlier in the year after the Democratic Republic of the Congo, the world’s top producer, imposed export restrictions in February.
The rebound has ended a three-year slump for cobalt, a key ingredient in high-performance EV batteries and consumer electronics. The tighter market has strengthened the position of suppliers, although negotiations with major NCM battery makers could be challenging, given the wide range of available suppliers.
The higher offers also coincide with signs of recovery in China’s battery industry after a slowdown that began in 2023 due to overcapacity.
“The rebalancing of supply and demand has slightly increased battery and supply chain pricing from trough levels,” said Yuqian Ding, head of China autos research at HSBC, in a note dated 11 November cited by Reuters.
NCM battery chemistries, which rely on cobalt and nickel, remain the preferred choice for longer-range and performance-focused electric vehicles, while lithium iron phosphate (LFP) batteries continue to dominate the mass-market segment because of their lower cost and higher stability.
Analysts told Reuters that sustained high cobalt prices could increase production costs for NCM batteries in 2026, potentially accelerating efforts among manufacturers to develop cobalt-free alternatives.
Follow us on
