Lithium prices remained low in 2024 on the back of oversupply and weak demand.
Lithium carbonate spent the majority of the year contracting, shedding 22 percent between January and December. Prices started the 12 month period at US$13,160.20 per metric ton (MT) and ended it at US$10,254.16.
The weak price environment was the result of a supply glut, a factor that S&P Global expects to persist in 2025.
Against that backdrop, S&P is projecting continued lithium carbonate price declines next year, with the annual average price projected at US$10,542 in 2025, down from US$12,374 in 2024 and a steep drop from US$40,579 in 2023.
Adding to price pressure, advances in alternative battery technologies are posing challenges to lithium’s traditional dominance. In 2024, these factors combined to create a year of volatility and transformation for the critical battery metal.
Market saturation emerged as a key theme for lithium early in the year as a continued surplus weighed on prices.
Prices for lithium carbonate remained in the US$13,000 range for January, but began to rise in mid-February, ultimately reaching a year-to-date high of US$15,969.26 on March 14.
The price momentum was attributed to announcements that some new projects were being delayed, while operations in development and production were being transitioned to care and maintenance.
“We also began to see some supply response to the persistent lower price environment, with the announcement of delays to expansion plans and layoffs at some lithium producers or aspirants,” Adam Megginson, analyst at Benchmark Mineral Intelligence, told the Investing News Network during the first quarter.
“I only expect this to palpably impact the supply picture in 12 to 18 months, as that is when these expansions were planned to ramp.”
This precarious landscape was fertile ground for M&A deals, which occurred throughout the year.
The acquisition will grant Pilbara Minerals access to Latin Resources’ flagship Salinas lithium project in Brazil’s Minas Gerais state, enhancing its presence in the burgeoning North American and European battery markets.
These deals helped make lithium one of the most active M&A segments in the critical minerals space.
As one of the largest end-use segments for lithium, the EV industry is a key factor in the market.
Weak North American EV sales early in the year offset some positivity out of Asian markets; however, in late Q3 and Q4, global sales began to pick up momentum. In October, the Chinese EV market set another monthly record with 1.2 million units sold, a 6 percent month-on-month increase. According to data from research firm Rho Motion, EV sales between January and October were up 24 percent compared to the same period in 2023.
With that in mind, the proposed repealing of the tax credit has raised concerns among automakers and environmental advocates about the future of America’s competitiveness in the rapidly growing global EV market.
Canada also introduced a 25 percent surtax on Chinese steel and aluminum imports.
As uncertainty continues to plague the lithium space, analysts are projecting a sustained low-price environment into 2025, despite the production cuts and project delays that were prevalent in 2024.
“This suggests lower prices will need to persist for longer in the absence of any further price-induced cuts that rebalance the market sooner than our forecasts indicate.”
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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