Geopolitical Crossroads: Tariffs, Bans, and the Reshaping of Battery Material Supply Chains

Graphite Under the Tariff Hammer

The most significant recent development in the graphite market is the imposition of substantial anti-dumping (AD) tariffs by the United States on Chinese graphite, a critical component in lithium-ion battery anodes. The US Department of Commerce has set a preliminary AD tariff of 93.5% on active anode materials, including natural and synthetic graphite, from China. This, combined with previously announced countervailing duties (CVD) of 11.5%, President Trump's blanket 30% tariffs, and 25% Section 301 tariffs, results in an effective cumulative tariff rate of approximately 160% on Chinese graphite exports to the US. This aggressive stance aims to level the playing field for North American producers (like NOVONIX and the AAAMP coalition, which includes Syrah Technologies, Anovion Technologies, NOVONIX Anode Materials, Epsilon Advanced Materials, and SKI US), stimulating domestic production and encouraging diversification. Companies like POSCO Future M in South Korea are poised to benefit from this shift, seeking to partner with firms looking for ex-China EV battery supply. China, in turn, has recently added electric vehicle battery cathode material technology to its export restriction list, signaling a strategic move to safeguard its technological advancements and control key intellectual property within the battery supply chain.

Lithium's Price Slide and Regional Power Plays

The lithium market continues to grapple with persistent oversupply and stalled demand, particularly during the traditional EV sales lull in July and August. Chinese lithium carbonate prices hit a four-and-a-half-year low, and lithium hydroxide prices also experienced significant declines. This oversupply is exacerbated by high inventory levels across the value chain and a reluctance by upstream miners and midstream refiners to implement substantial production cuts. Australia, a leading lithium producer, faces risks to its market share as production accelerates in Argentina and Brazil, supported by favorable government policies. In North America, the drive for domestic lithium supply is intensifying. EnergyX is expanding its lithium brine resources in Arkansas's Smackover Formation, aiming for 50,000 metric tonnes per year of lithium hydroxide by 2030 through direct lithium extraction (DLE) technologies. American Battery Technology Company (ABTC) is also advancing novel, electrochemical lithium manufacturing technologies for its Nevada refinery, aiming for substantial reductions in chemical agent use and environmental impact. Critical Metals Corp, with its Wolfsberg Lithium Project in Austria, positions itself as Europe's first fully permitted lithium mine, ready to support the European market.

Cobalt and Nickel: Navigating Supply Restrictions and Demand Shifts

The cobalt market is experiencing tightening supply due to the Democratic Republic of Congo's (DRC) extended export ban on cobalt, which accounts for a significant portion of global mined supply. This led to IXM (owned by China's CMOC) declaring force majeure on its cobalt supply contracts. While this is expected to support prices, the impact may be gradual, as weak demand from the battery sector, particularly a shrinking share of nickel-manganese-cobalt (NMC) batteries in favor of lithium-iron-phosphate (LFP) chemistries, tempers potential gains. Indonesia is emerging as a critical alternative, with its share of global mined cobalt supply projected to triple by 2029. Meanwhile, the nickel market continues to face structural oversupply, expected to persist until at least 2031. Weak demand from the stainless steel and battery sectors, coupled with seasonal supply disruptions from the Philippines' rainy season, contributes to price pressure. The shift towards LFP batteries directly impacts nickel sulfate demand, further pressuring prices. Major players like CATL are establishing integrated nickel projects in Indonesia, demonstrating a strategic move towards localized battery supply chains.

Strategic Minerals as a Geopolitical Lever

The broader theme across these metals is the weaponization of supply chains and the increasing importance of critical minerals for national security and clean energy transitions. The Quadrilateral Security Dialogue (Quad) countries (US, Australia, Japan, and India) have pledged to collaborate on securing and diversifying critical mineral supply chains, explicitly aiming to counter dominance by any single nation. Australia is strategically leveraging its abundant critical minerals, including lithium and rare earths, as a bargaining chip in trade relations, seeking to attract investment and foster 'friend-shoring' initiatives. Even deep-sea mining is gaining momentum as a potential new frontier for nickel, cobalt, and manganese supply, with companies like The Metals Company receiving fast-tracked US government support to achieve mineral independence. Mexico's new government policy of not approving new mining concessions, while emphasizing domestic lithium production, also reflects this global trend of resource nationalism.