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Energy Storage Projects Stalled by Mineral Price Swings
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Unpredictable prices for critical minerals are holding back battery storage worldwide. Law firm DLA Piper found that 23% of the investors, lenders, developers and producers it heard from had seen otherwise sound energy storage projects postponed or cancelled because mineral pricing could not be forecast. DLA Piper traced the problem to China. Lithium, cobalt and graphite for battery cells are priced against benchmark indices shaped largely by the Chinese domestic market, and processing is also concentrated there. By that measure, nearly one in four storage investment decisions is being disrupted by price risk rather than by project quality.
Key takeaways
- Nearly one in four: DLA Piper found that 23% of respondents had seen otherwise viable energy storage projects delayed or cancelled over unpredictable mineral prices.
- China sets the reference: DLA Piper said lithium, cobalt and graphite prices follow benchmark indices driven largely by China's domestic market.
- Refining is concentrated too: DLA Piper said processing of battery minerals is heavily concentrated in China, so pricing and refining sit in the same market.
- The whole chain is affected: The 23% figure draws on investors, lenders, developers and producers, so the hesitation reaches every stage from supply to finance.
Table of contents
Why Viable Storage Projects Are Being Shelved
DLA Piper's central figure is 23%. That is the share of respondents, drawn from producers, developers, lenders and investors, who said a storage project with sound fundamentals had been pushed back or abandoned because mineral prices moved unpredictably.
These were not weak projects culled by a tougher market. Respondents described them as otherwise viable, which points to a single cause. Nobody could pin down the cost of the materials inside the cells with enough confidence to commit.
The respondents cover the whole chain, from producers to the lenders that fund construction. That means the hesitation is not confined to one kind of participant.
How China's Benchmarks Set Battery Mineral Prices
Battery cells depend on lithium, cobalt and graphite. DLA Piper said the prices of all three are tied to benchmark indices that move largely with conditions inside China's own market.
A benchmark index is a published reference price that buyers and sellers use to settle contracts. When that reference mainly reflects one country, its domestic supply and demand set the terms for projects everywhere else.
DLA Piper added that processing of these minerals is heavily concentrated in China too. China therefore holds both the refining and the reference price. That makes battery materials a geopolitical issue as much as a commercial one.
Why Price Swings Freeze Storage Finance
A battery project assumes that installed cost will hold steady long enough to secure financing and begin construction. Mineral prices that swing without warning break that assumption.
Lenders and investors feel the effect next. If cell costs cannot be estimated, neither can the return on a storage asset, and capital waits. DLA Piper's finding shows that waiting has become common enough to touch nearly one in four decisions.
Can storage investment recover from mineral price risk?
The case for
- Respondents called the delayed projects otherwise viable, so the stalled pipeline could move again if mineral pricing became predictable.
- The problem DLA Piper identified is price uncertainty, not weak project economics. That leaves room for pricing tools or contracts to address it.
The case against
- DLA Piper said benchmark indices for lithium, cobalt and graphite remain tied largely to China's domestic market.
- Processing is also heavily concentrated in China, so price formation and refining capacity sit in the same market.
What to be careful about
- Developers committing to storage projects carry cell-cost exposure that depends on lithium, cobalt and graphite benchmarks shaped largely by China's domestic market.
- Lenders and investors may keep deferring decisions while mineral pricing stays unpredictable, which would lengthen project timelines.
- Any geopolitical tension around critical minerals could add to the price swings that DLA Piper links to the delays.
The bottom line
DLA Piper's findings put a figure on mineral price risk in battery storage. Nearly one in four respondents have watched viable projects slip or collapse over pricing. The law firm places the source in China, through both the benchmark indices that set prices and the processing base behind them. The open question is whether the industry can loosen that link. That could happen through pricing references that do not depend on one domestic market, or through refining capacity elsewhere. Until one of those shifts happens, the price risk DLA Piper identified stays in place, and storage capital will keep weighing it.
What to watch
- Watch for a regional or mineral-by-mineral breakdown of DLA Piper's 23% figure, which would show which projects are most exposed. No date has been set.
- Watch for any lithium, cobalt or graphite price benchmark that is not anchored to China's domestic market. No launch has been announced.
Frequently asked questions
Why are energy storage projects being delayed in 2026?
DLA Piper found that 23% of investors, lenders, developers and producers had seen viable storage projects deferred or cancelled because critical mineral prices could not be predicted. The delays come from pricing uncertainty rather than weak project fundamentals.
Which critical minerals are behind the price uncertainty?
DLA Piper named lithium, cobalt and graphite, all used in battery cells. Their prices follow benchmark indices influenced largely by China's domestic market.
What role does China play in battery mineral prices?
DLA Piper said China's domestic market largely shapes the benchmark indices used to price lithium, cobalt and graphite. Processing of those minerals is also heavily concentrated in China.
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