World lithium market outlook for 2025

Investing.com — Daiwa Capital Markets stated in a analysis word to shoppers this week that it forecasts a 12-28% enhance in world lithium provide over 2025-2026, pushed by an increase in output from key areas akin to Argentina, Australia, and Africa. 

Nevertheless, they warn that lithium costs are prone to stay underneath strain because of an oversupply. The present worth of lithium carbonate equal (LCE) in China is round CNY78k/t, however Daiwa expects it to say no to CNY70-75k/t in 2025 because of rising manufacturing from lower-cost mines.

“[The] present lithium worth [is] not low sufficient to cease low-cost mines rising manufacturing quantity,” stated the agency.

Demand for lithium, particularly from electrical autos (EVs) and vitality storage techniques (ESS), is anticipated to gradual. 

EV battery demand progress is forecasted to drop from 35% YoY in 2023 to 15-17% in 2025-2026, and ESS battery demand progress may even decelerate, dropping from 42% in 2023 to 31-34% in 2025-2026. 

Daiwa believes this slowdown, mixed with rising provide, means that lithium costs will probably wrestle to keep up their current highs.

When it comes to manufacturing, Argentina’s salt-lake brines are anticipated to extend lithium output by over 80kt LCE in 2025, whereas African lithium tasks ought to contribute greater than 60kt LCE.

Australian Tier-1 producers like Wodgina and Mt. Marian are anticipated to ramp up manufacturing, however Tier-2 corporations could face margin pressures and will reduce manufacturing as lithium costs fall.

Regardless of a current rise in lithium costs because of China’s “substitute subsidy” coverage, Daiwa believes this enhance is unsustainable and expects additional worth declines within the first half of 2025. 

As such, the agency has downgraded Ganfeng to Underperform and maintains its destructive outlook on different main lithium gamers, warning that “early bottom-fishing within the lithium sector could also be dangerous.”