Prices for cobalt, lithium, and nickel—metals used extensively in building electric vehicles (EVs) and their batteries—have plummeted this year as demand for EVs and electronics in general has withered in China, the world’s largest EV market.

So far this year, cobalt’s price has cratered near record lows, lithium is down 70 percent, and nickel 40 percent.

The EV market has slammed on the brakes in China as the country’s economy has slumped sharply this year.

Also, lower prices likely reflect a return to normal market conditions after a buying frenzy in 2022, analysts told the Financial Times. Fearing future shortages, EV makers and others had raced to lock up long-term supplies of key minerals, bidding up prices to record levels.

That rush drove lithium’s price from less than $25,000 per ton to about $80,000 at the end of last year. Last week, the price had fallen back to $23,000.

Technological advances are reducing the amount of these metals needed in EVs and batteries, the FT noted.

Prices also have dropped as auto and battery makers drew from stockpiles of materials on hand, hoping prices will drop before they need to buy more. That reduced short-term demand.

In addition, higher interest rates have made it more expensive to hold large inventories of materials.

Cobalt is a byproduct of copper and nickel mining, so its price is controlled by demand for those other metals. As a result, sharply rising demand last year for copper and nickel created a glut of cobalt.

“This is irrational exuberance of 2021-22 reversing rather than some kind of massive doom and gloom setting in,” Benjamin Hoff, chief commodities researcher at Société Générale, said in comments quoted by the FT.

“I can’t remember a similar level of [cobalt] oversupply,” Jim Lennon, Macquarie Group’s senior commodities consultant, told the FT. “For the next three or four years, the projected supply increase is almost double the market size.”

However, prices could rebound “like a coiled spring,” he said, when EV demand returns in China and companies seek to rebuild depleted stocks and bid for new supplies.

TREND FORECAST: EV demand will rise and fall with nations’ and the world’s economies. However, the long-trend trend is toward growth. Because these metals will remain in short supply compared to long-term demand, their prices will rebound when the global economy strengthens and will rise at a faster rate than the economy as a whole.