{"id":1507455,"date":"2024-12-12T01:55:00","date_gmt":"2024-12-12T06:55:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1507455"},"modified":"2024-12-12T01:55:00","modified_gmt":"2024-12-12T06:55:00","slug":"the-lithium-glut-could-persist-until-2027","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/the-lithium-glut-could-persist-until-2027\/1507455\/","title":{"rendered":"The Lithium Glut Could Persist Until 2027"},"content":{"rendered":"

The Lithium Glut Could Persist Until 2027<\/span><\/p>\n

\n

Authored by Tsvetana Parskova via OilPrice.com,<\/em><\/a><\/p>\n

Lithium prices have dropped sharply, prompting production curtailments in Australia and China but not in Africa, where Chinese-owned mines maintain output.<\/em><\/p>\n

The global lithium market remains oversupplied, with UBS forecasting imbalances until at least 2027 despite recent production cuts.<\/em><\/p>\n

China’s strategic focus on EVs and low-cost lithium ensures continued mining, while a potential restocking phase could eventually boost prices.<\/em><\/p>\n

This year\u2019s plunge in lithium prices has forced curtailments in production in China and Western Australia as lithium miners look to limit losses and reduce the oversupply hanging over the market and prices.\u00a0<\/p>\n

<\/a><\/p>\n

However, the lithium glut has not gone away and the market could remain oversupplied until 2027, analysts say.\u00a0<\/strong><\/p>\n

One of the reasons for a persistent glut could be the fact that while producers in Australia and, to some extent, in China, are curtailing output and delaying project ramp-ups, lithium mines in Africa owned by Chinese battery makers are not reducing supply.\u00a0<\/strong><\/p>\n

The mines, especially those in Zimbabwe, continue to operate as Chinese battery makers continue mining operations to have low-cost lithium supply and maintain market share, industry insiders and analysts have told\u00a0Reuters<\/a>.\u00a0<\/p>\n

As a result, the market will continue to be oversupplied for the next two years, and not find balance until 2027, according to UBS.\u00a0<\/strong><\/p>\n

The bank still expects lithium supply to have increased by 25% this year and to rise by 15% next year, according to its estimates cited by Reuters.<\/p>\n

The supply boost is expected despite the recent curtailments at lithium mines in Australia.<\/p>\n

Global lithium miners have moved\u00a0to curtail production<\/a>\u00a0and shrink their workforce\u2014at least until market conditions improve.<\/p>\n

Last month, Australian miner Mineral Resources said it was shutting down\u00a0its Bald Hill lithium mine amid a crash in lithium prices in another\u00a0project curtailment<\/a>\u00a0in the industry.<\/p>\n

The low lithium prices have hit other producers and projects, too.<\/strong><\/p>\n

Australia\u2019s Liontown Resources said it would\u00a0reduce production<\/a>\u00a0from its Kathleen Valley lithium project, \u201cto prioritise higher margin ore at reduced costs to adapt to the low-price lithium environment.\u201d<\/p>\n

Pilbara Minerals has also announced a\u00a0suspension<\/a>\u00a0of a lithium processing plant in Western Australia.<\/p>\n

The world\u2019s largest lithium producer, North Carolina-based Albemarle, booked\u00a0a net loss of $1.1 billion<\/a>\u00a0for the third quarter amid lower pricing in the lithium value chain.<\/strong><\/p>\n

As part of measures to reduce costs and operations, Albemarle will be reducing its global workforce by an expected 6-7% and is slashing its 2025 capital expenditures by around 50% versus 2024 to an anticipated range of $800 million to $900 million.<\/p>\n

The reduction in some Chinese lithium supply is being replaced by output in Africa, which is serving the growing Chinese market, Albemarle\u2019s chief commercial officer, Eric Norris, said on the company\u2019s Q3\u00a0earnings call<\/a>\u00a0last month.<\/p>\n

\u201cIt is a fragmented market. It is a market with significant Chinese presence today. And it’s a market where you have a lot of young companies whose sole reason for existing is to raise a lithium project,\u201d<\/strong><\/em> Norris said, commenting on why more supply hasn\u2019t been curtailed.<\/p>\n

It could take longer for this market to rebalance, he added.\u00a0<\/p>\n

Many mines supplying Chinese battery makers wouldn\u2019t close amid the price plunge because they are integrated into downstream supply chains, analysts told Reuters.\u00a0\u00a0<\/p>\n

EV manufacturing and sales is a strategic priority for China\u2019s government, which would like to have cheap lithium supply flowing.\u00a0\u00a0<\/strong><\/p>\n

And China\u2019s electric vehicle sales\u00a0are surging<\/a>. November marked the fifth consecutive month in which battery electric vehicles and plug-in vehicles\u00a0outsold<\/a>\u00a0gasoline passenger cars.<\/p>\n

China\u2019s most recent rebound in demand has pushed local lithium prices higher. But the fundamentals of the global lithium market haven\u2019t changed much\u2014supply continues to outpace demand, setting the stage for at least another year of oversupply and depressed prices, analysts say.<\/p>\n

However, an expected phase of restocking of processed lithium for batteries could rebalance the market faster, according to Will Adams, head of base metals research at Fastmarkets, a commodity price reporting agency.<\/p>\n

\u201cWe\u2019re probably going to be stepping in and out of deficits for a while, but as the deficits get closer, look out for the restocking phase as that can really give prices a boost,\u201d<\/strong><\/em> Adams\u00a0said<\/a>\u00a0on a recent webinar on the global outlook for the battery raw materials market in 2025.\u00a0<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 12\/11\/2024 – 20:55<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/commodities\/lithium-glut-could-persist-until-2027<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

The Lithium Glut Could Persist Until 2027 Authored by Tsvetana Parskova via OilPrice.com, Lithium prices have dropped sharply, prompting production curtailments in Australia and China…<\/p>\n","protected":false},"author":0,"featured_media":1507456,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1507455","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1507455","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1507455"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1507455\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1507456"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1507455"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1507455"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1507455"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}