Lithium Edges Higher from 3-Year Low

Lithium carbonate edged higher to CNY 75,500 per tonne after steadying at the three-year low of CNY 71,500 through September, as economic stimulus from the Chinese government momentarily countered persistent concerns of an oversupplied market.

The flood of new supply relative to dwindling demand for new electric vehicles, the main use for lithium, drove carbonate prices to fall 21% this year after an 80% plunge in 2023.

Despite the glut, market players expect global supply to soar by nearly 50% this year, as hopes of eventual balance in the market drove Chile to signal it would aim to double output over the next decade, and the race to secure battery metals drove China to expand projects in Africa.

Adding to the bearish pressure, the EU placed a 9% tariff on Tesla EVs produced in China, adding to trade barriers against China-based EV manufacturers ranging from 36.3% and 17%.

Also, the US quadrupled duties on Chinese EVs to 100%, pushing against input materials for battery producers.