2024-11-18 03:15:00
Lithium prices recovered slightly as demand for electric vehicles picked up in China and supply dwindled. However, analysts warn There may still be a surplus of battery metals in 2025.
Spot prices for lithium carbonate in China have risen about 8% since the end of October and are currently at a three-month high. Futures prices on the Guangzhou Stock Exchange have risen 13% so far this week.
“China’s expansion of subsidies to encourage people to trade in used cars is helping a nascent rebound in metals that are crucial to the energy transition. The country’s electric car makers On track to achieve ambitious annual sales targetswhile inventory replenishment activity is increasing,” they said on the Bloomberg website.
There is also speculation that Donald Trump’s election victory could Chinese battery manufacturers encouraged to buy lithium before a potential trade war breaks out.
«Lithium Carbonate Demand Status in November Stronger than market expectations “This is a typical end of the off-season,” said Zhang Weixin, an analyst at China Futures Corp. He explained that China’s subsidies acted as incentives and battery manufacturers rushed to export before trade barriers were implemented.
Leah Chen, head of the battery metals team at S&P Global Commodities Insights, said China’s recent stimulus measures appear to have boosted consumer confidence. “Various cathode manufacturers Returned to the market to replenish inventory It has gradually decreased in recent months,” he noted.
On the supply side, the lithium market will decline for a long time this year Leading mines in Australia, China and other countries to close or cut costs. Notably, prices remain stuck at less than a fifth of their late-2022 peak.
According to statistics from the consulting company CRU Group, since the end of 2023, lithium mine production capacity has been reduced by 190,000 tons, and projects have been delayed by 50,000 tons. therefore, The consultancy cut its supply forecast for next year by 14%Battery market analyst Cameron Hughes explains.
Despite China’s economic rebound, Short-term global electric vehicle demand outlook remains downwardas electric vehicle manufacturers postpone new product launches.
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What are the main factors influencing lithium prices in the context of China’s electric vehicle market?
**Interview: The Future of Lithium Prices and Electric Vehicles in China**
**Editor:** Welcome, everyone! Today, we have the pleasure of speaking with Zhang Weixin, an analyst from China Futures Corp, who will help us unpack the recent developments in the lithium market. Thank you for joining us, Zhang.
**Zhang Weixin:** Thank you for having me!
**Editor:** To start, lithium prices have seen a slight recovery recently. Can you explain what’s driving this uptick?
**Zhang Weixin:** Certainly! The recovery in lithium prices is largely attributed to the rising demand for electric vehicles (EVs) in China, which has been bolstered by government subsidies to encourage the trade-in of used cars. This, combined with dwindling supply, has put upward pressure on prices.
**Editor:** Interesting. You mentioned government subsidies—how significant are these in stimulating the current demand for lithium?
**Zhang Weixin:** The subsidies are crucial. They not only encourage consumers to purchase new electric vehicles but also lead to increased production by battery manufacturers who want to capitalize on the growing market. This has resulted in a stronger-than-expected demand for lithium carbonate in November.
**Editor:** On the supply side, how are manufacturers responding to this demand? Is there any inventory replenishment happening?
**Zhang Weixin:** Yes, battery manufacturers are indeed rushing to replenish their inventories. Given the current market conditions, they want to guarantee their supplies before any potential trade barriers or changes in policy arise, particularly in light of the upcoming electoral changes in the U.S.
**Editor:** Speaking of potential changes, there’s speculation regarding Donald Trump’s election victory and its implications for trade. How might that affect Chinese battery manufacturers?
**Zhang Weixin:** There’s a sense of urgency among Chinese battery manufacturers to secure lithium supplies before any potential trade conflict escalates. This has led to increased purchasing activity as they prepare for future uncertainties in trade relations.
**Editor:** Analysts also warn that there may still be a surplus of battery metals by 2025. Can you elaborate on that?
**Zhang Weixin:** Yes, while we’re seeing a brief surge in demand now, we have to consider the bigger picture. Many new mining projects are coming online, which could lead to an oversupply situation in a few years if demand does not keep pace. The market can be quite volatile, and factors such as technological advancements and global shifts in EV adoption will play a critical role.
**Editor:** what are your thoughts on the future of lithium pricing?
**Zhang Weixin:** I believe that while we’re experiencing a short-term rebound, the long-term outlook will depend heavily on both supply and demand dynamics. If demand for EVs continues to grow and supply constraints persist, we may see prices stabilize or even increase. However, if oversupply emerges, we could face downward pressure.
**Editor:** Thank you, Zhang, for your insightful analysis on this rapidly evolving market. It’s clear that while there are opportunities ahead, challenges remain.
**Zhang Weixin:** Thank you for having me. It’s important to keep an eye on these trends!
**Editor:** That wraps up our interview today. Stay tuned for further updates on the lithium market and the electric vehicle industry.