Lithium Market Faces Mixed Prospects for 2025 Amid Supply and Demand Shifts
Recent industry reports paint a cautious outlook for the lithium market in 2025, with concerns about persistent oversupply keeping prices under pressure. Goldman Sachs maintains its conservative stance, highlighting a continued supply surplus despite strong demand growth driven by the electric vehicle (EV) market and renewable energy storage solutions.
Lithium prices have plummeted over the past year, with chemical prices falling below $10,000 per tonne. Benchmark Mineral Intelligence forecasts a 15% reduction in lithium production estimates for 2025 as producers focus on cost optimization to maintain profitability. While demand for lithium chemicals is projected to grow by over 20%, supply is expected to rise by more than 15%. S&P Global Commodity Insights anticipates a global surplus of 33,000 metric tons of lithium carbonate equivalent in 2025, down from the 84,000 metric tons projected for 2024. Analysts predict the annual average price for lithium carbonate will settle at approximately $10,542 per metric ton.
Argentina is emerging as a key player in the global lithium market, with the country expected to nearly double its lithium chemical output in 2025. Zimbabwe has also become a hub for hard rock lithium projects, attracting significant Chinese investment. These developments underscore shifting geographical dynamics in the industry as global supply chains evolve.
The EV market remains a primary driver of lithium demand. China continues to dominate, bolstered by record-breaking EV sales in late 2024. However, uncertainty looms in the North American EV sector under the Trump administration, with rising tariffs on Chinese EVs adding complexity to market dynamics. Adamas Intelligence forecasts global lithium demand to increase by 26% in 2025, reaching 1.46 million tonnes on a lithium carbonate equivalent basis.
While challenges persist, including geopolitical tensions and market imbalances, some analysts remain optimistic about a modest recovery in lithium prices. Periods of deficit and surplus may shape the market in 2025, with restocking phases potentially driving price improvements. The lithium industry must navigate these complexities to achieve sustainable growth in the years ahead.
