During the first half of April, the US Lithium Carbonate market continued its downward trend as supply has continued to outstrip demand. Market participants saw a significant decline in sentiments fueled by a lingering global surplus and a weak recovery in demand across major downstream sectors. Even with strong production activity in major exporting countries such as Chile, where major producers have continued to raise output, lithium prices in the United States continued to face pressure.

Although imports into the U.S. have been irregular, the available inventories of lithium carbonate are large. As of late 2024, total lithium carbonate stocks stood at approximately 110,000 metric tons, and forecasts show further accumulation to some 141,000 tons by 2025. Oversupplied market conditions have weighed considerably on market activity, with purchasers adopting a guarded approach and limited buying desire.

The Chilean miners have continued to adopt aggressive production tactics in the face of saturated lithium carbonate market conditions. Chile, the world's dominant lithium carbonate supplier, had produced an estimated 285,000 metric tons of lithium carbonate in 2024 and had intentions to hike that to 305,000 metric tons by 2025. But amid prolonged low prices, top Chilean player SQM has plans to cut capital spending this year. The decision, though an indication of anxiety in the supply chain, may not be enough to relieve the inventory burden at once.

In the United States, subdued demand remains the hallmark of the lithium carbonate market climate. Uncertainty regarding government tariffs, the discovery of diversified lithium sources, and lowered government incentives for battery manufacturing have all combined to slow down manufacturing operations. Downstream industries have reacted cautiously, with muted inquiries and modest procurement observed in early April.

One area of hope is the energy storage systems (ESS) segment, which is seen to provide growth opportunities in the medium to long term. Yet this growth has yet to offset the bearish sentiment of the wider market. Additional uncertainty has been added by speculation on possible policy changes under Donald Trump's administration that can change global trade patterns and further lower lithium carbonate outlooks.

While the general softness prevails, hints of resilience are being seen in the American auto industry. Electric vehicle (EV) sales showed an 11.4% year-over-year growth during the first quarter of 2025, at a total of close to 300,000 units. EVs represented 7.5% of new car sales, from 7% during the corresponding period last year. Such steady growth, while promising, is still too low to counteract the effects of oversupply and poor pricing along the lithium carbonate supply chain.