After a tumultuous 2024 that saw lithium carbonate prices tumble 22 percent amid a global supply glut, analysts predict another year of volatility.
According to S&P Global, lithium surplus is projected to narrow to 33,000 metric tons in 2025, down from 84,000 metric tons in 2024, as production cuts begin to temper excess output.
Demand from the electric vehicle (EV) market remains a key driver, with China maintaining its dominance after record-breaking sales in late 2024, while North American markets face uncertainty due to potential policy rollbacks under the Trump administration.
Meanwhile, geopolitical tensions continue to loom, with rising tariffs on Chinese EVs and escalating trade disputes reshaping global supply chains.
As 2025 unfolds, the lithium sector must navigate several complexities.
“The name of the game in lithium [in 2025] is oversupply. Excess production in places like Africa and China coupled with softer EV sales has absolutely hammered the lithium price both in 2023 and 2024. I wouldn’t think we can dig ourselves out of this hole in 2025 despite reliably strong EV sales,” said Chris Berry, president of House Mountain Partners.
Although strong electric vehicle sales may offer some support, Berry cautioned that the next 12 months could be unpredictable in terms of price activity.
“Lithium price volatility is a feature of the energy transition and not a bug,” he said. “You have a small but fast-growing market, opaque pricing, legislation designed to rapidly build critical infrastructure underpinned by lithium and other metals and this is a recipe for boom-and-bust cycles demonstrated by extremely high and extremely low pricing.”
For Gerardo Del Real of Digest Publishing, seeing prices contract by 80 percent over the last two years evidences a bottoming of the lithium market and also serves as a strong signal.
“I think the fact that we’re up some 7 percent to close the year in 2024 in the spot price leads me to believe that we’re going to see a pretty robust rebound in 2025 and I think that’s going to extend to the producers that have obviously been affected by the lower prices, but also to the quality exploration companies,” Del Real said during an interview with the Investing News Network (INN) in early December.
He went on to note for contrarian investors with a mid-to-long-term outlook, the current market presents a prime opportunity to re-enter the space.
Supply and demand dynamics
After several years of oversupply 2025 is anticipated to see widespread production cuts aiding in the market’s ability to absorb excess supply.
Production cuts have already started inside and outside of China, as William Adams, head of base metals research at Fastmarkets told the INN via email.
“We expect further cutbacks if prices do not recover soon in the New Year. While we have seen some cuts, we are also seeing some producers continue with their expansion plans and…
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