Lithium spot prices have more than doubled from their 2025 lows and traded above $20 per kg in 2026, while cobalt has recovered from around $10 per pound to above $25 per pound , according to CME Group. The rally has been sharp enough to catch producers off guard—and futures markets are finally catching up.
Open interest in CME's cobalt futures reached above 14,000 contracts in April 2026, up from just 2,300 when prices peaked in May 2022 . Lithium hydroxide futures now see average daily volume of 449 contracts year-to-date, with open interest exceeding 15,000 contracts —a market that barely existed when lithium prices collapsed in 2023. The Financial Times reported that trading of cobalt and lithium futures has risen sharply this year on leading European and U.S. exchanges, driven by renewed volatility.
The shift reflects something deeper than a cyclical bounce. Battery metals are becoming real commodities—with the price discovery, hedging tools, and speculative interest that come with it.
Why Did Producers Stop Hedging on the Way Down?
As lithium prices softened ahead of the market bottom in the third quarter of 2025, producers and merchants steadily accumulated short positions to hedge against further downside risk. Since the price bottom, however, this segment has moderated its short hedging activity , CME data shows.
Translation: producers left themselves exposed to the upside, betting the recovery would come. This pullback indicates that a larger portion of current production has been left unhedged, allowing producers and merchants to participate in the price recovery , according to CME's analysis of CFTC positioning data.
That's a gamble that paid off—for now. Lithium carbonate prices in China dropped to CNY 151,750 per tonne in late June, the lowest level in three months, following speculation that Contemporary Amperex Technology's Jianxiawo mine in Jiangxi province could resume operations in the second half of 2026 , Trading Economics reported. The mine was suspended last year due to permitting issues. If it restarts, the supply cushion evaporates quickly.
Meanwhile, automakers are making a different bet. Anna Chadwick, head of battery metals at broker Freight Investor Services, told Fastmarkets that "the growing demand for energy storage projects this year has been reflected in the healthy growth of the CME lithium carbonate contract, with this increased need to hedge directly correlated to an uptick in active participants and volumes traded" . The CME lithium carbonate contract recorded a monthly trading volume high of 2,373 lots in March 2026, followed by even higher activity in April , Fastmarkets data shows.
Energy storage—not EVs—is the new swing factor. Grid-scale battery deployments are less price-sensitive than passenger vehicles, and they're coming online faster than most forecasts anticipated.
Can Greenland Actually Deliver Rare Earths?
Rare earth elements remain the most geopolitically sensitive corner of the critical minerals complex. China controls 85 percent of the world's rare earth processing capacity , according to a May analysis in RealClearWorld. That's not mining—it's refining, the chokepoint that matters.
Greenland has been pitched as the solution. The United States Geological Survey has documented 1.5 million tonnes of proven rare earth reserves in Greenland, positioning it eighth globally in confirmed reserves . The Tanbreez deposit maintains concentrations exceeding 27% heavy rare earth elements, compared to 5-10% in traditional global deposits , industry assessments show.
But Fortune reported in January that Greenland's harsh environment, lack of key infrastructure and difficult geology have so far prevented anyone from building a mine to extract the sought-after rare earth elements . The rare earths found in Greenland tend to be encased in a complex type of rock called eudialyte, and no one has ever developed a profitable process to extract rare earths from that type of rock , according to rare earths expert David Abraham.
In June 2025, the U.S. Export-Import Bank sent a letter of interest to Critical Metals Corp for a $120 million loan to fund the company's Tanbreez rare earth mine in Greenland. If approved, the loan would be the Trump administration's first overseas investment in a mining project , the Center for Strategic and International Studies reported. That's a signal of intent—but not production.
CNN quoted Malte Humpert, founder of The Arctic Institute, who said "The idea of turning Greenland into America's rare-earth factory is science fiction. It's just completely bonkers" .
