Lithium costs have been unpredictable as a result of world tensions and mining difficulties. As reported by S&P World, in 2023, lithium carbonate costs shot up previous $80,000 per metric ton however later dropped as provide elevated and demand slowed. By early 2024, costs stabilized out however remained weak.
However as of March 21, Platts assessed lithium carbonate (CIF North Asia) at $9,200 to $9,550 per ton. This pressured a number of offers on maintain, and a few mining giants auctioned lithium for higher price discovery.
The report highlighted two important auctions within the first quarter of 2025.
- On March 5, Albemarle Corp. bought spodumene focus (5.61% Li₂O) for six,701 yuan per ton at its Zhenjiang plant, barely above the SC6 value after factoring in high quality, delivery, and taxes.
- On March 11, Jiangxi Jiuling Lithium Co. Ltd. auctioned 120 metric tons of battery-grade lithium carbonate for 75,400 yuan per ton—simply 100 yuan greater than the spot value in China.
These auctions recommend a small value rebound, however general, the market stays cautious.
Spodumene and Lithium Carbonate Costs Drop
Spodumene costs, which had been comparatively secure, noticed a 4.7% drop from March 12 to March 21, falling to $810/t. In distinction, Platts-assessed lithium carbonate DDP China decreased by only one.1% over the identical interval.
Refineries have been hit hardest, as lithium chemical costs have fallen greater than spodumene costs, resulting in destructive refining margins since mid-2024. This ongoing squeeze on profitability poses dangers for corporations depending on refining operations reasonably than uncooked materials extraction.
Falling costs have pressured lithium producers to cut back spending and delay tasks. That is how the trade is adjusting to falling lithium costs.
SQM’s Revenue Drops 40.9% as Lithium Costs Crash
Chile’s SQM, the world’s second-largest lithium producer, reported a 40.9% drop in fourth-quarter revenue. Regardless of promoting extra lithium in 2024, falling costs damage earnings.
Income hit $1.07 billion, barely above the $1 billion analysts anticipated. However with lithium costs down over 80% in two years, earnings took a success.
Gross sales grew about 20% from final yr, however decrease costs worn out the positive aspects. “Our average price dropped over 64%,” SQM stated, including that costs in early 2025 will probably be even decrease than in late 2024.
To regulate, SQM is chopping 2025 spending to $1.1 billion from $1.6 billion in 2024. Most of this may go to its Chile lithium operations ($550 million), with $350 million for iodine and $200 million for worldwide lithium tasks.
Sibanye Stillwater’s Exit Provides to Lithium Provide Worries
EV Increase Fuels Lithium Demand, However Coverage Shifts May Shake Market
The push for electrical autos (EVs) is driving long-term lithium demand as automakers ramp up manufacturing. Stricter emissions insurance policies worldwide are accelerating this shift, making a secure lithium provide extra crucial than ever.
Robust EV Gross sales in February
World gross sales of passenger plug-in electrical autos (PEVs) surged in February. In China, trade-in subsidies boosted demand, whereas in Europe, stricter CO2 rules performed a key function.
- Europe’s prime 4 markets noticed a 15.8% improve in PEV gross sales in comparison with final yr. New CO2 targets launched in January 2024 pushed automakers to step up.
- To ease stress, the European Fee proposed a short lived measure permitting corporations to satisfy targets over three years as an alternative of dealing with heavy fines in 2025. With out this, automakers may have confronted losses of €16 billion.
U.S. EV Market Faces Uncertainty
Within the U.S., PEV gross sales grew by 6.5% yr over yr in February, with a 4.5% month-over-month improve. Many rushed to purchase EVs earlier than potential tax credit score adjustments.
Nevertheless, a brand new invoice—”Eliminating Lavish Incentives to Electric Vehicles Act“—may shake up the market. Launched by Republican senators in February 2025, the invoice goals to:
- Finish the $7,500 tax credit score for brand spanking new EVs
- Remove incentives for used EV purchases
- Lower funding for EV charging stations
- Shut tax loopholes benefiting sure patrons
If handed, the invoice may gradual EV adoption by making autos costlier and charging much less accessible. EV demand remains stronghowever shifting insurance policies may reshape the market within the coming years.
A basic instance of Tesla. Regardless of general EV market progress, Tesla has struggled since final yr. February gross sales dropped considerably in key markets, falling 76% yr over yr in Germany and 49% in China.
A Ray of Hope: Boosting Lithium Output to Gasoline World Demand
Whereas some lithium producers are holding tight on provides, some are increasing mining and refining capacities to maintain up with the rising demand. Australia, Chile, and Argentina proceed to guide lithium extraction, whereas the U.S. and Europe are working to strengthen home manufacturing to cut back provide chain vulnerabilities.
On March 20, President Trump signed an government order to spice up the home manufacturing of crucial minerals. The order offers financing, loans, and funding assist for lithium mining and processing tasks within the U.S. to cut back reliance on imports from key lithium-producing nations like China.
