Lithium prices to decline by over 42 percent
The world’s biggest lithium producer, Australia has projected that lithium prices will decline by 42.7 percent in 2025 compared to 2023 due to rising supplies of battery metal, subdued Chinese demand and a lacklustre American electric vehicle (EV) market.
Rudairo Mapuranga
The world’s biggest lithium producer which mined about half of the world’s lithium in 2022 said the spot price of spodumene will fall to US$2,200 per tonne in 2025 from an average of US$3,840 per tonne in 2023.
According to a quarterly report by Australia’s Department of Industry, Science and Resources issued last month, lithium hydroxide, a refined version of the metal used in batteries, may decline to around $30,000 per tonne next year from an estimated average of $52,450 in 2023, the Department said.
Lithium carbonate, a precursor to the hydroxide, was 96,500 yuan per tonne on Thursday, down from about 170,000 yuan in September, according to Trading Economics.
“Prices are not expected to return to previous high levels such as during 2022 and early 2023 before 2025 due to the forecast surplus in supply,” the Department said. “Some higher-cost producers, such as lepidolite miners in China, have become unprofitable and cut production. However, most lithium producers will remain profitable at current prices and continue to produce.”
The lower spot lithium prices may make electric vehicles and batteries less expensive but they could also hamper investment to develop battery metal mining projects needed for the wider transition to cleaner energy. That could delay consumer acceptance, thwart attempts to limit climate change and increase costs in the long run.