Final month, the U.S. shocked international commerce with a ten% tariff on all imports. China was hit more durable—34% total, and as much as 145% on battery merchandise. Nevertheless, it was later diminished to 30%. Up to now, key battery minerals like lithium, nickel, cobalt, graphite, and copper are exempt. It is because the U.S. nonetheless relies on imports to satisfy clear vitality targets.
In April 2025, President Donald J. Trump signed an Executive Order to analyze how counting on imported processed essential minerals might hurt U.S. nationwide safety. Nonetheless, lithium is protected for now, however uncertainty is rising.
IEA has just lately analyzed that new tariffs might increase EV prices, delay battery tasks, and shake provide chains. If lithium is focused, costs might spike, and the race for U.S. refining will pace up. Let’s examine the case of lithium extra deeply.
Lithium Costs Stabilize as Provide Overtakes Demand
After years of volatility, lithium prices have stabilized. As per the IEA’s Global Critical Minerals Outlook 2025final yr international lithium demand rose 30% year-over-year. It reached greater than 200,000 tonnes of lithium, or round 1.1 million tonnes of lithium carbonate equal (LCE). This was roughly equal to all lithium demand in 2018.
This development was largely pushed by the electric vehicle (EV) sector, whereas vitality storage methods (ESS)—now accounting for 9% of lithium use are contributing considerably.
Nevertheless, provide grew even sooner, leaping by over 35%. This oversupply pushed lithium costs all the way down to round USD 12,000 per tonne of LCE, a pointy decline from the document highs of 2022.
Financial uncertainty and weaker client confidence within the U.S. might additionally scale back EV purchases, hitting lithium, cobalt, graphite, and copper demand. Giant-scale provide tasks, notably for capital-heavy minerals like copper, might stall or face delays, impacting future availability.
China Stays the Demand Large
In keeping with the EU’s Raw Materials Information System (RMIS)China consumed over 75% of worldwide lithium in 2024 as a consequence of its stronghold in battery manufacturing. South Korea and Japan adopted, owing to their vital battery cathode manufacturing capability.
The rise of LFP (lithium iron phosphate) batteries in EVs channeled most demand towards lithium carbonate, whereas lithium hydroxide, utilized in nickel-rich batteries, skilled slower development.
Nevertheless, RMIS has a distinct prediction. It reveals that demand for many battery materials will probably exceed provide after 2029–2030, apart from graphite, due to China’s fast development in artificial graphite manufacturing.
Lithium demand is rising quick. Nevertheless, with out main new investments, shortages might hit lithium markets between 2030 and 2040.
Forecast of worldwide Provide-Demand Steadiness for Lithium
Value Aid for Battery Makers
The dip in costs introduced welcome financial savings. IEA highlighted that in 2022, the lithium price in a typical 57 kWh EV battery was USD 67. By 2024, that determine dropped to only USD 15, easing the stress on EV producers.
Business Shakeups: Mergers, Closures, and New Gamers
IEA additionally analyzed how the low-price atmosphere triggered a serious trade consolidation. As an illustration, Red river acquired Arcadium Lithium, an organization fashioned from the merger of Livent and Allkem.
On the identical time, mine closures and venture cancellations occurred. A number of Australian operations shut down, and tasks within the U.S., like Rhyolite Ridgehad been scrapped as a consequence of poor economics.
But, new manufacturing hubs emerged:
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Africa noticed a fivefold leap in lithium provide, contributing 30% of recent output, particularly from Zimbabwe and Namibia, up from simply 6% in 2023.
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Latin America recorded a 65% improve, led by Argentina and Brazil. One spotlight was Eramet’s Centenario venture in Argentina, which started small-scale manufacturing utilizing direct lithium extraction (DLE)—a promising new methodology for tapping brine sources.
Lithium Costs in 2025: Volatility Forward
Analysts at Shanghai Metals Market (SMM) anticipate lithium prices to stay unstable all through 2025. Projections for battery-grade lithium carbonate vary between USD 9,000 and USD 12,000 per tonne, relying on how provide retains tempo with rising EV and ESS demand.
Right here’s the most recent lithium worth development prevailing between April and Might.
Lithium hydroxide can also be anticipated to rise in worth, pushed by the shift towards high-performance battery chemistries.
The submit Lithium Supply Outpaces Demand—for Now: What’s Ahead? appeared first on Carbon Credits.
