Jefferies said Friday that Western efforts to re-establish critical mineral supply chains are progressing but remain uneven when examined across specific materials and production stages.
On rare earth permanent magnets, Jefferies tallied planned US NdFeB magnet capacity at about 50,000 tonnes per year by 2030, coming from roughly seven projects. However, the firm noted most of that planned capacity is aimed at lower-grade industrial magnets. The higher-performance SH-grade magnets, which are typically used in automotive and wind power applications, are largely not addressed by current US plans, and Jefferies highlighted that actual physical output is lagging behind headline investment figures.
MP Materials (NYSE:MP) is a focal point in the rare earths discussion. Following export restrictions that prevented Shenghe in China from processing MP Materials' concentrate, the company now conducts separation operations in-house at its Mountain Pass facility. The company is producing NdPr oxide internally and accumulating inventories while it awaits completion of full downstream processing capacity.
Lithium markets have experienced pronounced volatility. Jefferies documented a mid-cycle trough near $8,000 per tonne lithium carbonate equivalent (LCE), followed by a surge to roughly $25,000 per tonne. That spike was attributed to the suspension of around 27 lepidolite mines in Jiangxi province, accelerating energy storage system (ESS) demand, and pre-Chinese New Year restocking activity. Prices have moderated since that peak and are now reported in a range near $20,000 to $21,000 per tonne, with Jefferies pointing to softer China electric vehicle sales and disruptions to Middle East ESS supply as contributing factors.
Looking ahead to chemistry and material preferences, Jefferies said lithium carbonate is expected to remain the favored product through about 2030. This preference is driven by the dominant use of LFP chemistries in both electric vehicle and ESS applications. Jefferies also sees structural oversupply in hydroxide persisting over this period.
Jefferies' forecasts for demand growth remain robust: global electric vehicle growth is estimated at about 20% year-on-year in 2025, while energy storage installations are projected to reach roughly 300 GWh in 2025 and to more than double by 2030. The firm expects LFP to represent about 70% of EV battery packs in 2025 and to remain the dominant chemistry through 2030. By comparison, LMFP volumes are expected to be small, at approximately 20 to 30 kt in 2025 versus roughly 2.8 to 2.9 million tonnes of LFP.
Despite policy support and capital flowing to Western supply chains, Jefferies warned that economies of scale, pricing power and liquidity for rare earths, lithium and battery materials will remain concentrated in China through at least the end of the decade. The firm noted that China’s anti-involution policy lowers the likelihood of restarts for the suspended Jiangxi mines, and it cited a range of $18,000 to $20,000 per tonne as a minimum sustainable lithium price.
What this means
Progress is measurable but uneven: planned capacity increases do not yet address key high-grade magnet demand, lithium prices remain cyclical and material preference trends tilt toward carbonate and LFP through 2030, while market structure stays tilted toward China in the near to medium term.