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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.
“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.
As 2025 unfolds, the lithium sector will also have to navigate geopolitical tensions, including rising tariffs on Chinese EVs and escalating trade disputes that are reshaping global supply chains.
“The name of the game in lithium (in 2025) is oversupply. Excess production in places like Africa and China, coupled with softer EV sales, has absolutely hammered the lithium price both in 2023 and 2024. I wouldn’t think we can dig ourselves out of this hole in 2025 despite reliably strong EV sales,” said Chris Berry, president of House Mountain Partners.
In his view, the next 12 months could be unpredictable in terms of lithium price activity.
“Lithium price volatility is a feature of the energy transition and not a bug,” he said. “You have a small but fast-growing market, opaque pricing, legislation designed to rapidly build critical infrastructure underpinned by lithium and other metals, and this is a recipe for boom-and-bust cycles demonstrated by extremely high and extremely low pricing.”
For Gerardo Del Real of Digest Publishing, seeing prices for lithium contract by 80 percent over the last two years evidences a bottoming in the lithium market and also serves as a strong signal.
“I think the fact that we’re up some 7 percent to close the year in 2024 in the spot price leads me to believe that we’re going to see a pretty robust rebound in 2025. I think that’s going to extend to the producers that have obviously been affected by the lower prices, but also to the quality exploration companies,” Del Real said in December.
He believes contrarian investors with a mid to long-term outlook have a prime opportunity to re-enter the space.
As mentioned, widespread lithium production cuts are expected to help bring the sector into balance in 2025.
William Adams, head of base metals research at Fastmarkets, told the Investing News Network (INN) via email that output cuts for the battery metal have already started inside and outside of China.
“We expect further cutbacks if prices do not recover soon in the new year. While we have seen some cuts, we are also seeing some producers continue with their expansion plans and some advanced junior miners ramp up production. So we are now in a situation where we are waiting for demand to catch up with production again,” he said.
Adams and Fastmarkets expect to see lithium demand catch up to production in late 2025. However, he warned that refreshed demand is unlikely to push prices to previous highs set in 2022.
“We do not expect to see a return to the highs we saw in 2022, as there are more producers and mines around now and there has been a buildup of stocks along the supply chain, especially in China,” he said.
“This should prevent any actual shortage being seen in 2025, but stocks can be held in tight hands, and if the market senses a tighter market, then they may be encouraged to restock, which could lift prices. But the restart of idle capacity in such a case is likely to keep prices rises in check,” Adams added.
Analysts at Benchmark Mineral Intelligence are taking a similar stance, with a slightly more optimistic tone.
“In 2025, prices are likely to remain fairly rangebound. This is because Benchmark forecasts a relatively balanced market next year in terms of supply and demand,” said Adam Megginson, senior analyst at the firm. He also referenced output reductions in Australia and China, noting that they may not be as impactful as some market watchers anticipate.
“These supply contractions are likely to be balanced by capacity expansions due to come online in China in 2025, as well as in African countries like Zimbabwe and Mali,” Megginson said.
“Expect supply from these other regions to play a bigger role in the market in 2025.”
Geopolitics is likely to play a key role in the lithium market this year, both directly and indirectly.
Whether these tariffs against China will be enough to bolster the domestic North American EV market remains to be seen; however, the issue could become even more complicated if US President-elect Donald Trump makes good on his threats to levy tariffs on America’s continental trade partners, Canada and Mexico.
Del Real doesn’t expect US tariffs on critical minerals like lithium, but expressed concerns about a trade war.
“The bottom line is getting into a tit-for-tat with China is a dangerous proposition because of the leverage they have, especially in the commodity space, and so the tariffs are going to be passed down to consumers,” he said. In his view, Trump’s tariff threats could be more of a negotiating tactic than a sustained strategy.
More broadly, the experts INN heard from expect resource nationalism, near shoring and supply chain security to play prevalent roles in the lithium market and the critical minerals space as a whole.
“There’s no doubt that lithium in particular has become politicized as policy makers across the globe have awoken from their slumber and realized that dependence on critical materials and supply chains in a single country is a bad idea for both economic and national security,” said Berry, noting that China had this realization decades ago.
“There is no easy fix, and you’re looking at roughly a decade before any western countries have any sort of a regionalized or ‘friend-shored’ supply chain. Accelerating this would involve massive capital investment, patience and most importantly, political will. North America in particular has made great strides in recent years, but we have a long way to go. I’m not sure if fully decoupling from China is even a good idea,” the battery metals expert added.
For Benchmark’s Megginson, 2025 could be a year of increased domestic development.
“We have seen several countries attempting to adopt some form of ‘resource nationalism.’ In some cases, this has been driven by wanting to onshore the production of critical minerals that are necessary for defense and nuclear applications. In others, it stems from a desire to be more self-sufficient so they can be more resilient to supply shocks.”
Proposed tariffs from Trump could also serve as a catalyst for US lithium output.
“With the incoming Trump administration, everyone has their eyes on how promises of increased tariffs will be implemented. Ultimately, heavier tariffs would accelerate efforts to onshore capacity in the US,” Megginson said.
“We may see the EU following suit with tariffs. There has been much said of the diversification of the lithium market away from China, but many of those efforts stalled in 2024 as the downswing in prices and a shifting geopolitical landscape made these endeavors more challenging,” added the Benchmark senior analyst.
This nationalistic focus is also projected to impact refinement capacity and jurisdiction.
“While extracting the lithium from the ground has been successfully done in non-incumbent countries, such as in Brazil, Central Africa and Canada, with others expected to follow, the building of refining capacity has proved more difficult from a know-how and cost point of view, with a number of companies announcing that they are reining in some expansion plans, canceling some building projects or delaying decisions,” Adams of Fastmarkets said.
He went on to note that South Korea is an area to watch.
Elsewhere, Adams pointed to the desire to secure supply chains. “Resource nationalism has also been an issue in some jurisdictions, with more countries now wanting processing capacity to be built in the country, and in order to force that they have banned the export of lithium-bearing ores. Zimbabwe a case in point,” he told INN.
While the factors mentioned will undoubtedly impact the lithium industry in 2025, the market’s most pronounced driver is the EV sector, and to a lesser extent the energy storage system (ESS) space.
“Demand for lithium-ion batteries is set to continue to grow rapidly in 2025. Benchmark forecasts that EV and ESS-related demand for lithium will both increase by over 30 percent year-on-year in 2025,” said Megginson.
To satiate this uptick in demand, “additional volumes of lithium will need to come to market.”
Megginson also noted that robust ESS demand is a positive demand signal for lithium-iron-phosphate (LFP) cathode chemistries, but is unlikely to outweigh the mounting EV demand in China.
This sentiment was echoed by Berry of House Mountain Partners, who expects the EV and ESS sectors to continue dominating market share in terms of lithium end use. “EVs and ESS are roughly 80 percent of lithium demand, and this shows no signs of abating. Other lithium demand avenues will grow reliably at global GDP, but the future of lithium is tied to increasing proliferation of the lithium-ion battery,” he commented to INN.
Despite weak EV sales in Europe and North America in 2024, Fastmarkets’ Adams expects to see a recovery in demand from these regions, paired with strong sales in China. The dip in European sales, particularly in Germany after subsidy cuts in early 2024, mirrors China’s 2019 slowdown following subsidy reductions. However, as with China, the decline appears temporary, with a recovery expected as stricter emissions penalties take effect in Europe in 2025.
Additionally, Adams pointed to the growing adoption of extended-range EVs, which address range anxiety and use larger batteries than plug-in hybrid EVs, as a catalyst for lithium demand.
However, he noted that the outlook for EVs in the US remains uncertain as Trump takes the helm.
“ESS demand has been particularly strong, especially in China, and we expect that to continue as the need to build renewable energy generation capacity is ever present and has a wide footprint. For example, ESS buildout in India is strong, whereas demand for EVs is less strong, but again it is strong for 2/3 wheelers,” said Adams. He added that low prices for battery raw materials have lowered prices for lithium-ion batteries, benefiting ESS projects.
Ultimately the lithium market is expected to see volatility in 2025, but could also present opportunities.
“I can see a 100 to 150 percent rebound in the lithium spot price easily in 2025. And again, I think there’s a lot of opportunity there,” Del Real of Digest Publishing emphasized to INN.
For Megginson, the sector will be shaped by geopolitics and relations moving forward.
“Policy will have a huge role to play in driving price trends in 2025,” he said.
“For instance, there remains uncertainty around how the tariffs promised by an incoming Trump administration in the US would be implemented, and how they could reshape the global lithium landscape.”
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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.
An ongoing lithium market surplus continued to weigh on prices and impede sector growth in 2024.
However, a move toward consolidation has prompted some analysts to declare a bottom for the commodity.
“There are currently only 101 lithium mines in the world, and even as more mines and exploration projects come online, the added supply may likely not be able to keep up with demand,” Jacob White wrote.
Demand from China alone is projected to climb by nearly 20 percent annually over the next decade.
The impact of lithium shortages may also be heightened by the current low-price environment.
“This is especially evident given that the current unsustainably low lithium prices have led to project curtailments and driven some miners to reduce capital expenditures and investments in future supply,” White noted.
Year-to-date gain: 220 percent
Market cap: C$106.11 million
Share price: C$0.80
Exploration firm Q2 Metals is exploring its flagship Mia lithium property in the Eeyou Istchee James Bay region of Québec, Canada. The property contains the Mia trend, which spans over 10 kilometers. Also included in Q2 Metals’ portfolio is the Stellar lithium property, comprised of 77 claims and located 6 kilometers north of the Mia property.
“These assays continue to validate the potential and scale of the Cisco Property as that of a larger mineralized system,” said Neil McCallum, vice president of exploration. “One important observation of these results is the higher-grade nature of the larger mineralized system as we test and track the system progressing to the south.”
Year-to-date gains: 73.08 percent
Market cap: C$67.57 million
Share price: C$0.45
Exploration company Power Metals holds a portfolio of diversified assets in Ontario and Québec, Canada.
According to the company, the project features lithium-cesium-tantalum potential, with peraluminous S-type pegmatitic granites intruding into metasedimentary and amphibolite formations.
The company also launched a Phase 2 drone magnetic survey that is geared at refining its structural model for critical minerals targets at West Joe and the Main zone ahead of 2025 exploration efforts.
Year-to-date gains: 45.28 percent
Market cap: C$163 million
Share price: C$0.77
South America-focused Lithium Chile owns several lithium land packages in Chile and Argentina.
Lithium Chile will retain its Argentinian lithium projects, and transfer its 111,978 hectares of Chilean lithium properties to Lithium Chile 2.0 and its portfolio of gold assets in Chile to Kairos Gold.
The company said the buyer “is a large, Asian based company founded over two decades ago (and) a diversified enterprise with significant interests in mining, renewable energy, and technology sectors.”
The move to sell its flagship asset signals a strategic realignment for Lithium Chile. Although company shares reached a year-to-date high of C$0.88 in March, the recent sale news has pushed shares to the C$0.80 level.
Year-to-date gains: 26.09 percent
Market cap: C$47.53 million
Share price: C$0.29
Volt Lithium is a lithium development and technology company aiming to become a premier North American lithium producer utilizing its unique technology to extract lithium from oilfield brine.
The news caused its price to shoot up more than C$0.08 during trading that day.
Year-to-date gains: 14.89 percent
Market cap: C$62.9 million
Share price: C$0.27
Mineral exploration and development company Nevada Lithium Resources is focused on advancing its flagship Bonnie Claire lithium-boron project, located in Nye County, Nevada, US.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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