Battery-grade lithium traded at US$25.15 per kilogram on May 13, more than triple the $8.10 average of June last year and the highest level since September 2023, according to data from Fastmarkets.
Nickel changed hands at $19,017.50 a ton on the London Metal Exchange the same day, up 27.8 percent from December, while cobalt hit $57.83 a pound, the strongest reading since July 2022.
The rally reverses a brutal two-year slump in battery metals brought on by an electric-vehicle demand lull and a glut of Chinese supply. It now coincides with two converging forces: surging EV sales in Europe and Asia as drivers flee record-high petrol prices triggered by the Iran war, and a parallel boom in energy-storage demand tied to artificial intelligence data centers.
Battery-electric cars accounted for 19.4 percent of the EU market in the first quarter, up from 15.2 percent a year earlier, the European Automobile Manufacturers' Association said. March registrations alone jumped 51 percent on the year to more than 224,000 vehicles across 15 key European markets.
Fastmarkets said in its January 2026 battery raw materials update that lithium prices had nearly doubled over the prior two months, driving battery cell costs up by 15 to 20 percent to around $46 to $48 per kilowatt-hour at the start of 2026.
For LG Energy Solution, Samsung SDI and SK On — collectively the only serious non-Chinese force in the global battery market — the timing is fortunate.
The three are linked to automakers through pricing contracts that pass raw-material costs through to customers with a lag of about three months, a mechanism that punished earnings during the 2024 to 25 price slide but should now flip into a tailwind.
LG Energy Solution said in an April 30 statement that despite increase in shipments of both cylindrical EV and ESS batteries and ongoing cost-reduction efforts, the company posted a quarterly loss, driven by initial ramp-up costs associated with the expansion of ESS production sites.
The company added that its ESS business now represents the mid-20 percent range of total revenue, underscoring the pivot from electric-vehicle cells to stationary storage that all three Korean firms are pursuing.
"Western governments have little incentive to invest in lithium refining," said Choi Tae-yong, an analyst at DS Investment & Securities.
The flip side is darkening for South Korea's carmakers. Batteries account for about 40 percent of the cost of an electric vehicle, and Hyundai Motor Group — which includes Kia — is already navigating fierce Chinese price competition at home and abroad.
Hyundai sources roughly 95 percent of parts for its domestically built combustion-engine cars from Korean suppliers, but management is reviewing a broader shift to Chinese components. The group's global parts bill jumped to 84 trillion won last year, up 45 percent from 2021.
Domestic market data tell a similar story. About 220,177 EVs were newly registered in Korea last year, with Kia ranking first at 60,609 units, or 27.5 percent of the market, followed by Tesla at 59,893 units and Hyundai at 55,461 units, the Korea Automobile & Mobility Association said. Chinese-made EVs surged 112.4 percent to 74,728 units, capturing a 33.9 percent market share.
Whether higher cell prices will be absorbed by automakers or passed on to consumers remains an open question. Battery raw-material costs filtering into retail EV pricing would undercut the industry's long-stated goal of price parity with combustion-engine cars — and could deepen the cost advantage of Chinese rivals built around cheaper lithium iron phosphate, or LFP, chemistries.
For now, the war-led surge has handed South Korean battery makers a near-term reprieve after their first simultaneous quarterly loss. For Hyundai and Kia, the road ahead looks rockier.
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