After years of torrid growth, 2024 was a lacklustre year for the global electric vehicle industry and, consequently, for global lithium demand.
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. 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.
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. Consequently, high-cost petalite units are being shuttered 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. In Australia, only one lithium mine — Greenbushes — is currently cash flow positive.
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. 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.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 are expanding at meaningful volumes.