Lithium Market Poised for Rebound in 2025
After a tumultuous two-year period, the lithium market is expected to stabilize in 2025, driven by a combination of factors including the reopening of shuttered mines and robust electric vehicle sales in China.
Supply and Demand: A Delicate Balance
The global lithium supply glut, which peaked at nearly 150,000 tons equivalent of lithium carbonate (LCE) last year, is predicted to shrink by half to around 80,000 tons in 2025, according to Antaike, China’s state-owned commodity data provider. This reduction in supply, coupled with buoyant demand, is expected to outpace production this year.
China’s EV Market: A Key Driver
China, the world’s largest electric vehicle market, has intensified policy support to boost sales, with doubled EV subsidies in July contributing to a lithium price rally late last year. As of mid-December, more than 5 million cars had benefited from these incentives, which are expected to continue supporting prices in 2025.
Analysts Weigh In
“We expect to see a price recovery for lithium in 2025 as the curtailments seen in 2024, and the possibility of further curtailments, will significantly reduce the market surplus,” said Cameron Hughes, battery markets analyst at CRU Group. David Merriman, research director at metals research company Project Blue, predicts prices will stabilize around an average of $11,092 per metric ton in 2025.
Cautious Optimism
While the outlook for lithium prices appears promising, analysts caution that any significant price rise this year is likely to be capped as production can be swiftly scaled up at many closed mines if it proves profitable. Additionally, potential U.S. policy changes under the incoming administration, including fresh tariffs on EV battery imports from China or slashing domestic EV incentives, may pose risks to lithium demand.
Price Projections
Guotai Juan, a Chinese broker, forecasts a price range of 60,000 yuan ($8,184) to 90,000 yuan ($12,276) per ton in 2025. The most-traded lithium contract on the Guangzhou Futures Exchange traded between 68,250 yuan and 125,000 yuan per ton last year.
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