Lithium hydroxide followed a similar process, in which fastmarket analysts noticed a decrease in the prices of 89 percent for lithium hydroxi-monohydrate of battery quality between 2022 and 2025.
“The lithium industry absolutely navigates through a period of complexity,” said Paul Lusty, head of the raw materials of the battery at fastmarkets, at the lithium supply and battery raw materials conference of fastmarkets in June.
“We are undoubtedly confronted with headwind, and we also see a lot of negative or bearish sentiment widespread in the market, and I think it is sometimes strengthened by voices that have really overlooked the phenomenal requirement that we see in many aspects of the market.”
Lusty, however, explained that, despite the fact that they are confronted with a multi-quarter price tag, the long-term drivers of Lithium remain robust and are mainly powered by what he described as ‘megatrends’.
“The basic principles are really still very strong, and these are anchored in some very powerful, mega trends that we see developing within the global economy; the urgent urge for mitigating climate change, once in a generation shift in the worldwide energy system, and also the turnout of energy, intensive intensive intensive intensive intensive intensive.
Chinese extensions behind lithium oversupply
Although the long -term prospects for lithium remain positive, oversupply and market saturation have added headwind during the first half of 2025. The demand, in particular from the electric vehicle sector, remains strong, but the global lithium mine stock is surpassed, with an estimated 22 percent alone in 2024.
“We predict a similar year on annual increases for both 2025 and 2026 that are equal to approximately 260,000 tons of extra (lithium carbonate) only this year,” explained the Lusty of Fastmarkets.
“Chinese producers have been particularly aggressive in terms of growing capacity.” Australia, Argentina and Chile also stimulate growth in addition to emerging producers such as Brazil and various African countries.
According to Data from the US Geological SurveyMINED Supply from China rose by 14.85 percent of 35,700 tons in 2023 to 41,000 in 2024, but an asterisk notes that the langes are estimates, and exact numbers can be “retained to prevent the company’s company from being unveiled.”
For fastmarkets it is probably probably higher.
“China has quickly expanded its mining footprint, so that the domestic lithium output has been stimulated by 55 percent since 2023 and is on the way to surpass Australia as the world’s top producer by 2026,” said Lusty. “One of the most striking developments is the rise of African stock that we started to see for the past two years,” said Lusty.
Africa’s emerging role in the lithium sector
The importance of African offering for the future Lithium Market was also the subject of the presentation of Claudia Cook, “The Lithium Market Shift: the role of China and Africa in re -defending the offer.”
During the 20-minute overview, Cook explained that China is increasingly looking at African hard-rock lithium supply to offer raw materials for the growing chemical segment of the country.
So much so that by 2030 18 percent of the global hard-rock lithium supply will come from the continent.
In addition, the continent will see an increase of 170 percent in hard-rock lithium supply output between 2025 and 2035, according to Cook, which attributes the enormous expansion to the needs of China to diversify his lithium sources because of the domestic supply restrictions. To facilitate this question, China has invested heavily in African production.
“In 2025, 79 percent of the African output will be in China,” she said. “However, that percentage reduces to 65 percent in 2035, with the increase in the tonnage, although there is a reduction in the percentage, there will be almost doubling in terms of how much that is actually deported.”
Regional Cook pointed to Zimbabwe and Mali as the country to see the most growth.
In 2025, only Zimbabwe is expected to be good for 70 percent of African lithium supply, although the share is expected to fall by 2035 to 43 percent if new countries will be online.
Despite that shift, the African output will generally rise considerably, with countries such as the DRC, Ethiopia and Namibia expected to start production by 2035, Cook said.
Lithium question rises, but the prices are left behind
The rapid rise in the offer has pushed prices to multi -year lows, levels that are not sustainable and do not stimulate the new production. Despite this question, it will remain strong and is expected to grow.
According to the US Geological Survey, the worldwide lithium consumption in 2024 was estimated at 220,000 tons, an increase of 29 percent compared to revised consumption of 170,000 tons in 2023.
Much of the question story is attributed to the rising global EV sales, which rose by 35 percent in Q1. Lithium consumption in this segment is expected to grow by 12 percent until 2030.
“This year it is expected that this year is expected to surpass around 20 million units in 2025 that represent more than a quarter of all cars sold,” said Lusty.
Future lithium demand will remain supported by deep structural shifts in global energy consumption.
“We witness the extraordinary battery demand that is linked to the electrification of the world economy and the rise of renewable energy,” said Lustyt, pointing to rising electricity needs and the increasing role of storage solutions.
In 2024, the global demand for electricity increased by more than 4 percent, which added 1,100 Terawatt hours to the grid, more than the total annual consumption of Japan. This marks the biggest increase of the year after year outside the rebounds after the recession and reflects wide trends such as larger access to electricity, the proliferation of energy-intensive devices, the expansion of artificial intelligence and data centers and the shift to heavy production of electrically driven.
In particular, it is expected that 95 percent of future demand growth will be achieved by renewable energy sources such as solar and wind, which stimulates the need for battery energy storage systems (BESS) to manage intermittency and stabilize grilles.
“Batteries are now essential – not only for EVs, but to balance power systems in sectors,” Lusty added.
In particular, data centers become an important growth motor. Since 2017, their electricity use has grown by 12 percent annually, according to Fastmarkets, with the US concentrating half of its centers in five regional hubs.
By 2030, Bess -question from data centers can only represent a third of the market, with a projected compound annual growth of 35 percent in the next five years.
In general, the lithium demand is expected to grow by 12 percent annually by 2030, supported by EV acceptance, renewable integration and digitization. Although China is currently good for 60 percent of the worldwide question, the dominance is expected to decrease as other regions scale up.
“The long -term fundamentals remain intact,” he said, “and it is difficult to imagine a future in which Lithium is not central to the global economy.”
What is the next step for Lithium in 2025?
After June the prices saw a low point of the year slipping, Lithium saw a short increase in the middle of speculation at the beginning of July on loss of supply from Australian Miners Mineral Resources (ASX: MN, OTC Pink: Malrf) and Liontown Resources (ASX: LTR, OTC Pink: Linrf). However, profits were reversed after the rumors were refused.
In the US, policy uncertainty remains on sentiment. A recovery of EV tax credits under the Trump administration could cause a sale in the short term, but support in the longer term seems vulnerable.
New fair competitive rules in China, aimed at reducing downstream dumping, have fueled speculation on wider effects. Although electric effects are unclear, the policy has contributed to the short price increase of July.
“The number of lithium market means that it is susceptible to be led by sentiment,” wrote Cook in a Monthly update.
“We mainly saw this in the game this month, because the prices were mainly demonstrated, mainly due to rumors about cuts in the field of supply, which emphasize how Twitchy and reactive the market is currently,” she continued.
“These rumors have since been denied … with healthy stock levels and the continued production of production, the reported supply reductions, even if they are true, may not be enough to baptize the market in a shortage.”
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Publication of securities: I, Georgia Williams, has no direct investment interest in a company mentioned in this article.
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