Lithium Market 2024 Year-End Review
Lithium prices remained low in 2024 on the back of oversupply and weak demand.
Lithium carbonate spent the majority of the year contracting, shedding 22 percent between January and December. Prices started the 12 month period at US$13,160.20 per metric ton (MT) and ended it at US$10,254.16.
The weak price environment was the result of a supply glut, a factor that S&P Global expects to persist in 2025.
In a November report, the firm forecasts a “global surplus of approximately 33,000 metric tons of lithium carbonate equivalent in 2025, a decrease from the 84,000 metric tons surplus projected for 2024 and 2023’s 120,000 metric tons.”
Against that backdrop, S&P is projecting continued lithium carbonate price declines next year, with the annual average price projected at US$10,542 in 2025, down from US$12,374 in 2024 and a steep drop from US$40,579 in 2023.
Adding to price pressure, advances in alternative battery technologies are posing challenges to lithium’s traditional dominance. In 2024, these factors combined to create a year of volatility and transformation for the critical battery metal.
Supply surplus weighs on lithium prices
Market saturation emerged as a key theme for lithium early in the year as a continued surplus weighed on prices.
The excess comes on the back of steadily growing mine supply over the last four years. In 2020, the annual global mine supply tally was 82,500 MT, a number that more than doubled in 2023 to 180,000 MT.
Prices for lithium carbonate remained in the US$13,000 range for January, but began to rise in mid-February, ultimately reaching a year-to-date high of US$15,969.26 on March 14.
The price momentum was attributed to announcements that some new projects were being delayed, while operations in development and production were being transitioned to care and maintenance.
“We also began to see some supply response to the persistent lower price environment, with the announcement of delays to expansion plans and layoffs at some lithium producers or aspirants,” Adam Megginson, analyst at Benchmark Mineral Intelligence, told the Investing News Network during the first quarter.
“I only expect this to palpably impact the supply picture in 12 to 18 months, as that is when these expansions were planned to ramp.”
Record-setting lithium M&A activity
This precarious landscape was fertile ground for M&A deals, which occurred throughout the year.
“As lithium projects struggle to stay above water, analysts also expect M&A activity to increase as major producers with positive cash flow try to find deals in the market while junior companies try to sell projects in a market where private capitals are scarcer than previous years,” a February 12 report from S&P Global states.
2024 started with the completion of Livent (NYSE:LTHM) and Allkem’s merger of equals. The deal saw the two companies combine under…
Read More: Lithium Market 2024 Year-End Review