Oversupply and Weak Demand Drive Down USA’s Lithium Carbonate Prices in September 24

Texas, USA: Lithium Carbonate prices continue to decline throughout September in the US region as oversupply and varying demand drag the market down. The global Lithium Carbonate market is experiencing rapid growth, with production rising sharply in key countries such as Chile, Australia, Argentina, and China. Despite consistent production increases, Chile's Lithium Carbonate export revenues are expected to decline due to these market conditions.

Lithium Carbonate and spodumene prices continue to decline as oversupply pressures dampen market sentiment. Despite current challenges, many producers are moving ahead with future expansion plans, which will be crucial as the market is expected to grow in the coming years. As per the latest assessment, the prices of Lithium Carbonate Battery Grade DDP USGC settled at USD 11400/MT in the week ending on 27th September 2024.

According to sources, Chile's lithium export revenue is expected to decline again this year, following a similar trend in 2023 due to falling prices. A report from the Chilean Copper Commission (Cochilco) indicates that Chile's lithium export revenue reached USD 1.59 billion in the first five months of the year, marking a 65% decline compared to the same period in the previous year.

On the other hand, in the US domestic market, Q3 was underwhelming for new vehicle sales in the U.S., though electrified vehicles offered a bright spot. Many automakers reported year-over-year sales declines as consumers grappled with high prices and steep interest rates. The EV market also faced challenges, with much of the industry scaling back investments due to increasing competition and slowing demand.

Despite challenges, Q3 was shaping up to be another record for EVs. Battery-electric, hybrid, and plug-in hybrid sales saw double-digit growth for several automakers, even as others reported overall declines. With the upcoming Federal Reserve meeting in early November, factors like a potential rate cut and the close of the model and calendar year could result in better car deals by late 2024.

The latest assessment shows that production rates of Lithium Carbonate have remained unchanged for an extended period. As per the latest data, In Q2 2024, the US saw a notable rise in lithium and critical mineral imports, with processed lithium materials, such as Lithium Carbonate and lithium hydroxide, increasing by 8.7% year-over-year to 3,709 metric tons. Refined lithium compounds, crucial for battery production, surged by 49.2% to 17,122 metric tons.

Chile and Argentina were the leading suppliers, with Chile providing 61.7% and Argentina 35% of the total imports. Demand for Lithium Carbonate remains stagnant, with procurement of new supplies slowing further due to high domestic stock levels. Overall, trading activity in the Lithium Carbonate market was limited, with procurement occurring only on an as-needed basis.

According to the ChemAnalyst pricing intelligence, the prices of Lithium Carbonate are foreseen to remain at lower levels in the upcoming weeks.