Wheres can this UPI article be found that everyone keeps referring to??
The Drudge report times out.
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Announcement from ERM has made my day. :)
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Lithium market could see modest recovery in 2025
After years of torrid growth, 2024 was a lackluster year for the global electric vehicle industry and, consequently, for global lithium demand.
While the EV market in Asia Pacific performed well, sales growth in the Americas slowed substantially and in Europe shifted into reverse, translating into a substantial slowdown in lithium demand growth.
At the same time, the flood of new supply in recent years, which producers in Australia and elsewhere are only now fully coming to grips with, saw lithium prices languish at levels roughly 80% below their peak.
At Adamas Intelligence, a Toronto-based battery metal and EV consultancy, we expect Asia Pacific, led by China where EVs now represent more than half of all vehicles sales, to continue to drive the global EV market in 2025 and beyond.
We’re also optimistic about prospects for a reacceleration of EV sales in the Americas and Europe, although the introduction of trade restrictions by the EU on made-in-China cars and the incoming Trump administration’s plans for broad trade tariffs and a walk-back on climate goals are wildcards.
With battery material costs lower across the board, greater affordability should also provide support for the market next year.
In 2025, Tesla aims to increase EV production by 500,000 units for the year with the release of the much-anticipated low-cost passenger car to be followed later by its much-touted robotaxi.
In Europe, automakers are set to face stricter CO2 standards and targets from next year, the first incremental change since 2021, spurring the expansion of more affordable mass market EV offerings on the continent.
The Chinese EV market will remain the no 1 driver of lithium demand and should receive a boost in 2025 not only through Beijing’s broader economic stimulus program, but ongoing incentives for Chinese buyers to switch from gasoline-powered cars.
EVs, PHEVs and energy storage
Interestingly, in China the rising popularity of extended range plug-in hybrid electric vehicles (PHEVs) has offered some salvation for lithium demand in the past year owing to the especially large battery packs these vehicles possess.
On the battery chemistry front, nickel- and cobalt-free lithium-iron-phosphate (LFP) batteries will continue to capture market share from their nickel-cobalt-manganese (NCM) counterparts, in turn favouring lithium carbonate over lithium hydroxide, although the story differs from region to region.
Outside the EV market, we expect global lithium demand for energy storage systems to continue to surge next year, representing 13% of aggregate lithium demand, growing at 45% year-on-year.
Overall, we expect global lithium demand to increase 26% to 1.46 million tonnes in 2025 on a lithium carbonate equivalent (LCE) basis, up from an estimated 1.15 million tonnes this year.
Supply cuts: between rock and a hard place
Throughout this year, confusion as to who exactly represented the marginal supplier appears to have caused boardrooms to focus on rosy longer-term demand predictions leading to a deepening supply glut.
Despite subdued prices, China’s strategic lepidolite and Zimbabwean spodumene supply continued to come online while Australian spodumene producers adjusted production only slightly, focusing instead on cost efficiencies.
The delayed reaction from higher-cost hard rock miners meant only modest supply cuts have materialized to date, although that started to change in late 2024 as operations continued to lose money.
CATL’s curtailment of operations at its Jianxiawo mine has effectively debunked the loss leader narrative that held a large proportion of these high-cost Chinese lepidolite units would feed the market indefinitely.
From its peak in June 2024, China’s lepidolite production has halved to a level more in step with fundamentals.
As such, we expect continued downward pressure on lepidolite production next year.
Rushed African supply
In Africa, projects that were rushed to market could fade away as prices stay low.
Born out of the last peak price cycle, Chinese-controlled Zimbabwean mineral concentrate sources have stabilized, though there are signs of distress.
Their speed to market strategy hurt plant efficiencies, delivered low product grades, and owing to poor infrastructure, transport costs are substantial.
Consequently, high-cost petalite units are being shuttered (for example Sinomine’s Bikita mine) while the more remote operations face challenging ramp-up economics including Yahua’s newly constructed Kamativi mine and several Nigerian mines which may not deliver commercial volumes until prices recover.
Harsh realities for Aussie miners
In Australia, only one lithium mine — Greenbushes — is currently cash flow positive.
Reflecting this reality, Mineral Resources put its Bald Hill operation into care and maintenance in November, following Pilbara Minerals’ earlier decision to suspend its Ngungaju plant.
In the interest of capital preservation, the industry is delaying development of the next generation of supply like Arcadium’s Fenix 1B and Galaxy projects.
As in times past, we expect this to exacerbate volatility when supply deficits emerge.
In future, with increased participation of large-cap resource companies, such as Rio Tinto or ExxonMobil, we may see more orderly transitions between cycles.
Big year for South America, DLE
Brine-sourced lithium units, comfortably cash flow positive at these prices, will continue to grow in line with demand in 2025, with expansions expected in Chile, together with a host of Argentinian and Chinese projects entering production.
Direct lithium extraction technology (DLE) promises greater recoveries and significantly shortened production time for brines. Emerging DLE developers will keenly follow Eramet’s ramp-up of its Centenario in Argentina, particularly considering Tsingshan’s sudden departure from the project in October.
Owing to evaporative brine projects limited scalability and the industry’s blistering rate of growth over the last decade, DLE will need to prove commercially viable for brines to maintain its market share.
Overall, we expect global lithium supply to increase 16% to 1.58 million tonnes LCE in 2025, up from an estimated 1.36 million tonnes this year.
Modest price recovery in offing
China’s lithium chemical inventories have effectively doubled throughout 2024.
This build-up is most pronounced in lithium hydroxide, as evidenced by the pronounced pressure seen in lithium hydroxide and spodumene concentrate markets.
An expected 115,000 tonne LCE surplus next year should put the lid on any near-term price spikes.
Although due to lag effects of mined material moving through a growing supply chain, the effective inventory build at the margin is much lower.
Our models point to days of inventory (inventory normalized by consumption) declining slightly through next year’s first half.
This is conditional on a continued reduction in high-cost lepidolite and petalite mineral concentrate production.
If that happens, the present spot price (US$10-11/kg VAT inclusive lithium carbonate) should see a modest recovery.
This view is perhaps shared by Ganfeng Lithium which recently locked C$180 million of its Pilbara Minerals equity within a collar option, a near-term price-neutral derivative trade, signalling it doesn’t expect further deterioration.
Production increases
The largest individual contributors to supply next year will be Liontown Resources’ Kathleen Valley mine in Western Australia and Ganfeng’s Goulamina mine in Mali, while incumbent Tier 1 producers (Talison’s Greenbushes and SQM’s Atacama) are expanding at meaningful volumes.
Though not our base case expectation, should conditions remain subdued, a major Australian spodumene operation could go into care and maintenance in 2025.
By our numbers, Mineral Resources’ Wodgina mine could be the first to go, balancing the market by 55,000 tonnes LCE, although management appear keen to avoid this given the opportunity cost incurred exercising this option during the last cycle.
Liontown’s Kathleen Valley will undoubtedly face pressure during ramp up and is at a real risk of faltering if prices remained depressed beyond 2025.
That said, with a revitalized mine plan, a fresh capital structure, deep pocketed stakeholder support and potential state tax holidays, Kathleen Valley should emerge from the market slump.
Swing supply to dampen any rally
We also note a generous proportion of swing capacity has or will be sidelined, theoretically capping any price rallies.
Idled capacity in Australia includes Finniss, Mt. Cattlin, Ngungaju, Bald Hill and Wodgina Train 3.
In China there is vast lepidolite capacity, while Zimbabwe offers capacity at Sabi Star, Bikita and Arcadia.
As we have observed in past cycles, restart economics typically require a sustained period of supportive prices.
In the current market, this is realistically above $15-20/kg ($15,000 to $20,000 per tonne) lithium carbonate.
In our view, by the time prices are consistently at these levels, sufficient structural deficits will have emerged, effectively nullifying the price dampening effects of restarts.
In summary, we see the lithium market in 2025 continuing to adjust supply through cuts, delays to project development, stockpiling and other measures, while strong demand brings modest price relief.
mining.com
Ganfeng begins production at Goulamina lithium mine in Mali
China’s Ganfeng Lithium said it has commenced production from the first phase of its Goulamina spodumene project in Mali.
Goulamina represents one of the largest lithium mines in Africa. Ganfeng — China’s largest lithium producer — acquired Australia’s Leo Lithium’s 40% stake in the project for $342.7 million in May.
mining.com
Food for thought
GLTAH's
Cheers
Frank
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