Spot vs Contract Pricing for Critical Minerals
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Spot and contract prices for the same mineral can move in opposite directions in the same year. In 2025 USGS recorded Chinese spot lithium carbonate rising from about $9,300 to about $10,300 per tonne while the average U.S. fixed-contract price fell 31% to $9,000 per tonne. Governments are now writing a third kind of price into contracts: a floor, such as the $110 per kilogram neodymium-praseodymium oxide price that MP Materials' agreement with the Department of Defense sets for ten years.
-31%
change in the average U.S. fixed-contract lithium carbonate price in 2025, to $9,000 per tonne
+11%
rise in the Chinese spot lithium carbonate price (c.i.f.) from January to November 2025, $9,300 to $10,300 per tonne
$110/kg
neodymium-praseodymium oxide price floor in the Department of Defense agreement with MP Materials, for 10 years
Source: MP Materials
$59.9 million
price protection income MP Materials recorded in the first half of 2026
Source: MP Materials
What are the main ways critical mineral deals set price?
Deals differ in when the price is set and who carries the risk. The table gives a documented example of each arrangement.
| Arrangement | How the price is set | Documented example | Who carries price risk |
|---|---|---|---|
| Spot | Agreed at or near delivery, usually from a published assessment. | Chinese lithium carbonate (c.i.f.) rose from about $9,300 a tonne in January 2025 to about $10,300 in November; 6% spodumene (f.o.b. Australia) from about $800 to about $970. | Buyer and seller at the delivery date. |
| Fixed or term contract | Agreed for a period, often at signing. | The average U.S. fixed-contract lithium carbonate price was $9,000 a tonne in 2025, down 31% from 2024, while spot prices rose. | Whichever side the market moves against during the term. |
| Exchange or assessed benchmark | Quoted daily on an exchange or by a price reporting agency. | Cobalt: the U.S. spot cathode price averaged $21 per pound in 2025 against $16.77 in 2024, and the London Metal Exchange cash price $15 against $11.84. | Whoever is exposed on the day; hedgeable where an exchange contract exists. |
| Government price floor | A fixed minimum agreed with a producer. | Department of Defense and MP Materials: $110 per kilogram for neodymium-praseodymium oxide for 10 years. MP recorded $17.6 million of price protection income in the second quarter of 2026. | Government pays when the market is below the floor. |
| Contract for difference | A floor and a ceiling around a reference price. | Australia's Critical Minerals Strategic Reserve can use contracts for difference: government tops up if prices fall below an agreed floor, and industry pays back if they rise above a ceiling. | Shared between government and industry. |
| Offtake at a set or moving price | Fixed price or one that moves with the market, agreed in a long-term purchase deal. | Australia's reserve lists offtake agreements that can be at a set price or one that moves with the market. | Depends on the formula chosen. |
Sources: USGS Mineral Commodity Summaries 2026 lithium and cobalt chapters; MP Materials, 10 July 2025; MP Materials, second quarter 2026; Australian Department of Industry, Science and Resources.
Why can contract and spot prices move apart?
Contract prices reflect the terms and timing of agreements made earlier, while spot prices reflect today's market. USGS says concern about lithium oversupply kept prices low in the first half of 2025, and that EV sales growth and demand for battery energy storage lifted prices in the second half, so a fixed contract signed or averaged earlier in the year can sit below a late-2025 spot price. The same data series also differ in what they cover: carbonate and hydroxide, c.i.f. and f.o.b., and China and the United States. The pricing page explains the four mechanisms and the benchmarks page the agencies.
What does a price floor cost, and who pays?
A floor transfers market risk to the party that sets it. MP Materials recorded $17.6 million of price protection income in the second quarter of 2026 and $59.9 million in the first half, which is money the floor paid on top of market sales. The Department of Defense agreement also sets a 10-year offtake for magnets from MP's planned 10X facility. The floor gives the producer a stable revenue base for financing, and the government carries the downside if the market stays below $110 per kilogram; see offtake agreements for the Lynas deals with the same floor.
Frequently asked questions
What is the difference between spot and contract pricing?
A spot price is agreed at or near delivery and reflects the current market, while a contract price is set for a period under an agreement. In 2025 the Chinese spot price for lithium carbonate rose from about $9,300 to about $10,300 a tonne, while the average U.S. fixed-contract price fell 31% to $9,000.
What is a price floor in critical minerals?
A price floor is a minimum price a government agrees to pay or guarantee. The Department of Defense agreement with MP Materials sets $110 per kilogram for neodymium-praseodymium oxide for 10 years, and MP recorded $59.9 million of price protection income in the first half of 2026.
What is a contract for difference?
A contract for difference sets a floor and a ceiling around a reference price. Under Australia's Critical Minerals Strategic Reserve the government tops up if the market price falls below an agreed floor, and industry pays the government back if the price rises above a ceiling.
Why do lithium price figures differ between sources?
They measure different things: spot or fixed-contract prices, carbonate or hydroxide, c.i.f. or f.o.b. delivery, and China or the United States. USGS reports a $9,000 per tonne U.S. fixed-contract carbonate price for 2025 and Chinese spot carbonate between about $9,300 and $10,300.
Sources
Read on October 13, 2026. Figures on this page come from these documents; where a number is an estimate, the source says so.
- USGS Mineral Commodity Summaries 2026: lithium
- USGS Mineral Commodity Summaries 2026: cobalt
- MP Materials: partnership with the Department of Defense (10 July 2025). Company press release
- MP Materials: second quarter 2026 results. Company press release
- Department of Industry, Science and Resources: Critical Minerals Strategic Reserve. Read in a browser
