Lithium Woes Spillover Into 2025, But US And China Quietly Build Reserves

Despite finding some footing in 2024, the lithium market's main concerns, oversupply and slower-than-expected electric vehicle (EV) adoption could persist this year.

"This swing supply dynamic could serve as a cap on price increases in 2025, as rapid restarts may lead to a more oversupplied market than currently forecast," Federico Gay, principal lithium analyst at Benchmark Mineral Intelligence said, according to the BNN Bloomberg's report.

Current analyst projections estimate lithium carbonate prices will stabilize around $10,685 per ton in 2025. As prices have dropped over 80% since 2022, the market's "invisible hand" stepped in.

Suspended outputs and delayed expansion plans helped lithium regain its footing, but significant rebounds remain unlikely.

BloombergNEF recently downgraded its EV adoption forecast, citing geopolitical and economic uncertainties.

Donald Trump's return to the U.S. presidency has shifted policy focus back to fossil fuels, which may further dampen demand for battery metals.

Despite these headwinds, China has solidified its position in the lithium market, raising its reserves from 6% to 16.5% of the global total, making it the second-largest global market.

New reserves include spodumene mines in Tibet and lithium salt lakes in the Qinghai-Tibet Plateau—now the third largest in the world. With a low-cost alternative, China aims to reduce reliance on imports and further strengthen its influence on the EV market.

Yet, the U.S. is quietly growing its reserves, with Nevada in the center.

Lithium Americas LAC has significantly increased reserves at its Thacker Pass project near the Nevada-Oregon border, with proven and probable reserves jumping 286% (since 2022) to 14.3 million tons of lithium carbonate equivalent (LCE).

The project's expanded lifespan and increased capacity position it as a critical supplier for General Motors' EV production. Lithium Americas also appointed Luke Colton as CFO to guide the project's development, which is set to commence later this decade.

Meanwhile, Nevada Lithium's NVLHF Bonnie Claire project has made remarkable progress. The company announced a 68% increase in inferred resources at its Lower Zone, now holding 25.6 Mt of LCE at an average grade of 3,085 ppm lithium.

This development represents a threefold improvement in grade compared to prior estimates, with additional high-grade boron resources adding further value. The company was recently listed on the Toronto Venture Stock Exchange, where it trades under the ticker NVLH.

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