A persistent lithium glut and the prospect that some mines could be restarted if prices rise means the battery metal is unlikely to mount a significant recovery this year.
Lithium prices have plunged since late 2022 on oversupply and slower-than-expected growth in electric vehicle demand. The rout has resulted in some mining capacity being suspended, but most analysts still see a surplus this year, although they forecast it will be smaller than in 2024.
Underlying the reluctance to reduce supply — or the readiness to bring it back too soon — is the fact that demand is expected to rise rapidly over the longer term as the energy transition gathers pace. Geopolitical tensions — including the prospect of hefty tariffs — may also be encouraging miners to keep digging on fears the market could split into rival trade blocs.
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