Global lithium prices are forecast to stabilize in 2025, bringing relief after a sharp two-year decline. Analysts credit China’s electric vehicle (EV) market and mine closures for absorbing excess supply, offering hope to an industry battered by an 86% price drop since November 2022.
The global supply glut is expected to shrink by nearly 50%, from 150,000 tons of lithium carbonate equivalent (LCE) in 2023 to around 80,000 tons this year, according to Antaike, China’s state-backed commodity data provider. Cameron Hughes, a battery markets analyst at CRU Group, highlighted the impact of mine shutdowns. “We expect significant reductions in market surplus, which will support a price recovery in 2025,” Hughes said.
China, the world’s largest EV market, has doubled subsidies for EV purchases since July 2024, leading to a surge in sales. More than five million vehicles have already benefited from these incentives, helping stabilize lithium prices. A buyer at a mid-sized Chinese cathode material plant noted, “The uptick in lithium trade in late 2024 is undeniably linked to the subsidy policy.”
Market projections vary but suggest cautious optimism. Project Blue, a metals research firm, expects average lithium prices to stabilize at $11,092 per metric ton in 2025. Meanwhile, Guotai Juan, a Chinese broker, forecasts prices between 60,000 yuan ($8,184) and 90,000 yuan ($12,276).
However, risks remain. David Merriman, research director at Project Blue, warns that reopening shuttered mines could cap price gains. “Price improvements are likely towards the end of 2025 as inventories deplete and buyers return to the market,” he added.
Despite uncertainties, industry insiders remain hopeful that China’s EV subsidies and mine curtailments will bring much-needed balance to the lithium market by next year.
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