Lithium Market Faces Challenges in 2024

Li-FT Power Ltd (LIFT), a leading North American lithium company, is navigating the challenging landscape highlighted in the August 2024 S&P Global Commodity Insights report. The lithium market is under pressure due to global macroeconomic trends, shifts in electric vehicle demand, and resulting impacts on supply and pricing.

Global EV Market Declines

The EV market is showing a decline, as reported by S&P Global, with a 2.2% drop in plug-in electric vehicle sales in July 2024. This downturn results from weakening consumer confidence, seasonal demand shifts, and increased tariffs in Europe, which saw a 29.9% fall in sales.

China’s EV Market Dynamics

China dominates the PEV market, with PEVs comprising 51.1% of all new car sales. However, the market is becoming less battery-metals intensive, as BEVs only made up 54.9% of PEV sales in July, down from 67.4% year-on-year.

Impact on Battery Production

The PEV downturn affects battery production worldwide. General Motors halted its third battery plant in Michigan, and Umicore delayed its battery materials plant in Ontario.

Tariffs Impact EV and Battery Sector

Tariffs in the EU and U.S. prompt a new outlook for the PEV market. While intended to increase local production and reduce China’s BEV imports, they have raised costs and decreased sales potential.

Lithium Price Drop and Production Cutbacks

Lithium prices plunged, with the Platts-assessed spodumene concentrate price dropping by 15.6% to $760 per metric ton. This has led to supply reductions, as seen with Albemarle Corp’s decision to shut down one of its lithium hydroxide processing lines.

Market Oversupply and Price Forecast

S&P Global forecasts a continued decline in lithium prices due to oversupply. Lithium carbonate CIF Asia prices fell by 9.8%, reaching their lowest since April 2021.

Conclusion: Industry Challenges Ahead

Overall, the industry contends with reduced profitability and market uncertainty. Continued caution is required for producers navigating these economic challenges.

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