Key Takeaways 88% confidence
- China and Indonesia added more than three-quarters of all new global refined mineral supply growth since 2024, deepening rather than easing supply concentration.
- Cobalt prices rose 130% and tungsten prices surged sixfold between January 2025 and April 2026; lithium prices more than doubled over the same period.
- Lithium demand grew about 25% a year on average over the past two years, and the IEA expects it to more than triple by 2040 under current policies.
- Advanced economies committed $65 billion in public finance to critical minerals projects in 2025, up from $16 billion in 2023.
- Overall critical mineral investment still fell 9% in 2025, with battery-metals spending down 20% and lithium company investment down 40%.
- The IEA projects average recycling rates could rise from around 10% today to close to 20% by 2040 under existing policies.
The IEA's 2026 outlook shows refining power concentrating further in China and Indonesia even as lithium demand triples by 2040 and government stockpiling spending hits record highs.
Analysis 85% confidence
The headline finding in the IEA's 2026 Outlook cuts against two years of government rhetoric about diversifying critical mineral supply chains. Since China's rare earth export curbs began rattling manufacturers in 2023, Washington, Brussels, Tokyo and New Delhi have all announced funds, tax credits and joint ventures meant to build refining capacity outside China. The IEA's numbers show that effort has not yet dented China and Indonesia's combined grip on new supply: the two countries captured more than three-quarters of all growth in global refined mineral output over the past two years, and the average market-leading country's share of any given mineral actually rose, from 70% in 2023 to 72% in 2025.
The mechanism behind this is straightforward economics, not just policy inertia. Building a refinery or processing plant outside the dominant supplier country costs 20% to 150% more in capital and roughly 50% more to operate, the IEA found, because the incumbent producer already has the workforce, chemical supply chains and, in China's case, the coal-fired power that keeps costs down. Indonesia's nickel refining boom followed the same logic: a 2020 ore-export ban forced smelting onshore, and the resulting capacity now anchors the country's share of global growth alongside China's.
Prices reflect the strain on the minerals where China has tightened export controls. Tungsten, subject to new licensing rules Beijing introduced as part of a wider crackdown, jumped sixfold from January 2025 to April 2026. Cobalt rose 130% over the same window, compounded by a separate supply gap from the Democratic Republic of Congo's own export quota on the metal. Rare earths and gallium trade at roughly three to five times higher prices in Europe than inside China, evidence that the price a buyer pays now depends heavily on whether that buyer sits inside or outside Beijing's control of the supply chain.
The report's longer-run numbers point to a widening gap between where demand is headed and where diversification actually stands. Lithium demand grew around 25% a year over the past two years and the IEA expects it to more than triple by 2040 in its base-case policy scenario, driven by a battery market that grew over 35% in 2025 alone to surpass 1.5 terawatt-hours. Meeting that demand from a more diversified base would need real money: the IEA puts the investment required just to diversify rare earth magnet supply chains at $60 billion over the next decade. Public commitments have grown fast, from $16 billion in 2023 to $65 billion in 2025, but total private investment in critical minerals actually fell 9% last year, with lithium company spending down 40% and lithium exploration down 45%, as low prices in 2024 and early 2025 discouraged new projects before this year's price rally began.
Why This Matters 82% confidence
For countries like India that import most of their battery, magnet and semiconductor-grade minerals, the IEA's data is a warning that diversification is a decade-long, capital-intensive project rather than something a few trade deals can fix quickly. Buyers outside China should expect to keep paying a persistent price premium — as much as five times over for some rare earths and gallium in Europe — until new refining capacity elsewhere actually comes online.
Price Impact
The report documents already-realized price surges in cobalt (+130%) and tungsten (sixfold) alongside persistent supply concentration and falling exploration investment in key minerals like lithium and nickel, pointing to continued upward price pressure on several critical minerals even though the report itself makes no price predictions.
Market Snapshot Computed live
Based on metalscost.com's own tracked India reference price as of 2026-09-21 (current). Volume and open interest aren't tracked by this site and are intentionally left blank rather than estimated.
Technical Analysis Computed live
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Breakout probability: Low — price is trading mid-range.
Fundamental Analysis
Demand Drivers 85% confidence
Battery demand grew more than 35% in 2025 to surpass 1.5 terawatt-hours, pushing lithium demand up about 25% a year on average over the past two years; the IEA expects total critical mineral demand to almost double by 2040 and lithium demand to more than triple.
Supply Drivers 85% confidence
China and Indonesia supplied more than three-quarters of all new refined mineral output growth over the past two years, with Indonesia's dominance concentrated in nickel and China's spanning most other tracked minerals.
Government Policies 82% confidence
China tripled the number of mineral tariff codes subject to export controls since 2023, adding heavy rare earth controls in April 2025 and battery supply controls in October 2025; the DRC imposed its own cobalt export quota, opening a fresh supply gap.
Geopolitical Risks 78% confidence
The IEA estimates a full disruption to rare earth supply could put $6.5 trillion a year of downstream production at risk, and a full graphite disruption could threaten $300 billion a year, underscoring why governments are now stockpiling: advanced economies spend under $900 million a year holding strategic reserves of 11 high-risk materials.
Refinery Output 80% confidence
Smelter utilization inside China ran at about 85% in 2025 versus under 70% outside China, and China's copper smelting share rose to 50% in 2025 from about 15% in 2005 — China has driven over 90% of global smelting capacity growth since 2005.
Global Consumption 75% confidence
Critical minerals remain a small share of end-product costs today — about 3% of an EV's price and under 1% of a vehicle's value from rare earths alone — which the IEA says means even a tripling of rare earth prices would add only about 0.1% to EV costs, limiting near-term demand destruction from higher mineral prices.
Country Impact 78% confidence
| Country | Impact | Reason |
|---|---|---|
| China | High | Holds the largest and still-growing share of global refining capacity across most tracked minerals and has tripled the scope of its mineral export controls since 2023. — China's copper smelting share rose to 50% in 2025 from roughly 15% in 2005, and it runs smelters at about 85% utilization versus under 70% outside the country. |
| Indonesia | High | Nickel refining buildout, driven by its ore-export ban, makes it the second pillar of new global refined supply alongside China. — China and Indonesia together captured more than three-quarters of all growth in global refined mineral supply over the past two years. |
| India | Medium | As a large importer of battery and magnet materials, India faces the same price premium and diversification lag the report documents, while pursuing its own critical minerals mission and Quad-level cooperation. — Rare earths and gallium trading at three to five times Chinese domestic prices in Europe illustrates the premium India's manufacturers would also face buying outside China. |
Industry Impact 78% confidence
| Industry | Effect | Reason |
|---|---|---|
| Battery Manufacturing | Negative | Battery-metals investment fell 20% in 2025, the largest decline in a decade, even as battery demand itself grew more than 35%, pointing to a widening future supply gap. |
| Electric Vehicles | Positive | The IEA estimates critical minerals make up only about 3% of an EV's price, meaning even sharp mineral price increases translate into small final-cost impacts for automakers. |
| Recycling | Positive | Projected recycling rates nearly doubling by 2040 (from about 10% to close to 20%) open a growing secondary-supply channel that doesn't depend on new mines or China/Indonesia refining capacity. |
Timeline
2023-01-01: China's top-refining-country share of global critical mineral output stood at 70% as a baseline.
2025-04-01: China announced new heavy rare earth export controls.
2025-10-01: China announced new battery supply export controls.
2025-12-31: By year-end 2025, China's top-refining-country share had risen to 72%, and advanced economies' public finance commitments to critical minerals reached $65 billion for the year.
2026-07-16: The IEA published its Global Critical Minerals Outlook 2026.
Market Sentiment
Bullish Factors 78% confidence
- Cobalt and tungsten prices already up 130% and sixfold respectively, showing supply tightness is already showing up in prices, not just forecasts.
- Public finance commitments to critical minerals projects have quadrupled since 2023, to $65 billion in 2025.
- Copper company investment rose 8% in 2025 even as overall sector investment fell, signalling continued confidence in that specific market.
Bearish Factors 75% confidence
- Overall critical mineral investment fell 9% in 2025, with lithium company spending down 40% and lithium exploration down 45%, which could delay the very diversification governments are funding.
- China and Indonesia's combined share of new refined supply growth rose rather than fell over the past two years despite years of diversification policy.
Alternative Scenarios 68% confidence
- If the $65 billion in 2025 public commitments translate into completed projects on schedule, refining concentration could plateau or reverse over the next five years rather than continuing to rise.
- If China widens export controls further, following the pattern of April 2025's heavy rare earth curbs and October 2025's battery supply controls, price premiums outside China could widen faster than new capacity can absorb.
Who Benefits, Who Loses
| Party | Stance | Reason |
|---|---|---|
| Chinese and Indonesian refiners | Bullish | Rising market share and higher utilization rates (about 85% in China versus under 70% elsewhere) give incumbent refiners a durable cost advantage. |
| Recycling and secondary-supply companies | Bullish | The IEA's projected near-doubling of recycling rates by 2040 signals a policy tailwind for battery and magnet recycling businesses. |
| Manufacturers outside China buying rare earths and gallium | Bearish | Paying three to five times Chinese domestic prices for these inputs directly compresses margins for magnet, semiconductor and electronics producers based in Europe and similar markets. |
| Lithium miners and explorers | Bearish | A 40% drop in company investment and 45% drop in exploration spending in 2025 point to a financing squeeze even as long-term lithium demand is forecast to more than triple by 2040. |
Investor Watchlist 80% confidence
Educational items to monitor — not investment advice.
- Whether 2025's record $65 billion in public finance commitments converts into operating refining capacity outside China and Indonesia over the next two to three years
- Further Chinese export-control announcements, given the pace has already tripled the number of controlled mineral tariff codes since 2023
- Recovery in lithium and nickel exploration spending, both down 45% in 2025, as an early signal of renewed investor confidence
- DRC's cobalt export quota and its effect on global cobalt supply gaps through 2035
Price Risks 74% confidence
- Further Chinese or Indonesian export restrictions could push already-elevated rare earth, gallium and tungsten prices higher with little near-term substitute supply.
- A slower-than-expected buildout of the $60 billion in rare earth magnet diversification investment the IEA says is needed could keep non-China buyers exposed to price premiums for longer.
- Weak exploration spending in lithium and nickel (down 45% each in 2025) could translate into tighter supply and renewed price volatility once demand growth resumes in earnest.
Historical Comparison
2023 vs. 2025: Advanced-economy public finance commitments to critical minerals projects roughly quadrupled, from $16 billion to $65 billion, even as overall private investment in the sector fell 9% in 2025.
2005 vs. 2025: China's share of global copper smelting capacity more than tripled, from about 15% to 50%, tracking its broader rise to over 90% of all global smelting capacity growth added since 2005.
China
India