Analysts say lithium prices will stabilize in 2025 as mines close and Chinese electric car sales ease glut
SHANGHAI (Reuters) – Lithium prices are expected to stabilize in 2025 after two years of sharp declines as China's shuttered mines and strong electric vehicle sales absorb a supply glut, analysts and traders said, although mines The possibility of reopenings could limit gains.
The price of the electric vehicle battery metal has fallen nearly 86% over the past two years from its peak in November 2022, forcing companies around the world to mothball mines. But market participants say the closures mean buoyant demand should outstrip supply this year as China ramps up policy support to boost sales in the world's largest electric vehicle market.
China's state-owned commodity data provider Antaike said the global lithium supply glut is expected to halve to about 80,000 tonnes of lithium carbonate equivalent (LCE) from nearly 150,000 tonnes of lithium carbonate (LCE) last year.
Cameron Hughes, battery market analyst at CRU Group, said: “We expect lithium prices to recover in 2025 as production curbs in 2024 and the potential for further production curbs will significantly reduce market glut.” Provide further details.
China doubled electric vehicle subsidies in July, and as of mid-December, more than 5 million vehicles had been sold to benefit from the incentive.
Three analysts and two traders said China's electric vehicle subsidies pushed up lithium prices late last year and should continue to support prices in 2025.
“The growth in lithium trading business in the fourth quarter of 2024 is undeniably attributed to the subsidy policy,” said a buyer at a medium-sized cathode materials factory in China who requested anonymity because he was not authorized to speak. To the media.
David Merriman, research director at metals research firm Project Blue, said prices could improve by the end of 2025 as inventories are depleted and buyers return to the spot market.
Project Blue expects prices to stabilize at an average of around $11,092 per ton by 2025. Chinese broker Guotai Juan predicts a price range of 60,000 yuan ($8,184) to 90,000 yuan ($12,276).
Last year, the Guangzhou Futures Exchange's most-traded lithium contract traded at prices between 68,250 yuan and 125,000 yuan per ton.
Analysts warn, however, that any significant price increases this year may be limited because many shuttered mines can quickly expand output if they prove profitable.
Merriman said possible U.S. policy changes from the incoming Trump administration, including new tariffs on EV battery imports from China or cuts to domestic EV incentives, could also pose risks to lithium demand.