Bloomberg) -- Lithium industry watchers hoping the battery metal...

Bloomberg) -- Lithium industry watchers hoping the battery metal was poised to rebound from an epic slump have been hit by the realization prices have fallen again this month, with inventories piling up as electric vehicle demand signals stay gloomy.

Spot prices of lithium carbonate in China have slid to the lowest since August 2021 and the most-active futures on the Guangzhou exchange have lost 12% so far this month. In top producer Albemarle Corp.’s latest auction on June 19, the winning bid was down 6.9% from the previous sale on June 5.

The declines follow a plunge of more than 80% in 2023 due to a glut and slowing demand growth. Although prices stabilized earlier this year, the supply-chain is still working to clear inventories, with customers holding off purchases. The bearish sentiment has also been wreaking havoc on the stock prices of producers, including Albemarle and Piedmont Lithium Inc.

Rising lithium production and expectations of a summer lull are weighing on prices, according to Susan Zou, an analyst at researcher Rystad Energy. Despite the brief rebound earlier this year — underpinned by lower supply around China’s Lunar New Year holiday period and traders’ speculative buying — upward drivers have “mostly disappeared,” she said.

According to traders familiar with the matter, manufacturers grappling with slowing EV demand growth have been cutting orders for lithium products, in anticipation that they may soon be able to restock inventories at even lower prices.

Stock prices of lithium producers have been under pressure too.

As several of the world’s largest automakers including Ford Motor Co., General Motors Co., and even Tesla Inc. dialed back EV ambitions in recent months, investor sentiment toward stocks and miners that provide raw materials for those manufacturers has soured.