US Lithium Carbonate Market Demonstrate Stability in May 2024

Texas, USA: The Lithium Carbonate market has been consistently registering progressive steps in the US region and the price decline has come to a standstill. In the past month, the prices of Lithium Carbonate have held steady in the US market as both the supply and demand fundamentals have registered positive developments. With many companies involved in the Lithium Carbonate business having registered increased sales and profits, the optimism among the market participants has risen. As of June 7th, 2024, the discussed prices of Lithium Carbonate DDP USGC stood at USD 15000/MT.

Although numerous market participants state that the demand is waning, however, the sales figures suggest slow and steady growth with a few fluctuations being observed in seasonal trends. Industry experts predict that electric vehicle (EV) demand and sales in the US will slow in the near term, while China is expected to see steady growth. In the US, factors such as high interest rates, inadequate charging infrastructure, and uncertain economic conditions have led to concerns about affordability and range, contributing to a slowdown in EV sales, which is expected to stabilize soon.

Despite the current slowdown in EV sales in the US, long-term forecasts remain optimistic, with battery electric vehicles (BEVs) projected to account for 50% of sales by 2033 in the US. Even with delays in government targets and uncertainty regarding EV policies after the upcoming US presidential election, there is an optimistic outlook for the US. Increased sales are expected due to more locally produced EVs, supported by import restrictions on non-US manufactured products.

Additionally, Chinese automakers are anticipated to encounter stricter trade policies from the EU and US, imposing heavier sanctions on EV imports. This would likely lead to a decline in Chinese export sales, forcing Chinese EV manufacturers to navigate high tariff barriers and reconsider their expansion strategies.

In the recent developments in the Lithium Carbonate market, Chile’s state-run copper miner, Codelco, and Lithium Carbonate producer SQM have formed a partnership to jointly benefit from the extensive lithium sales deposits that are refined into Lithium Carbonate in the Salar de Atacama salt flat. This collaboration aligns with Chile’s strategy to increase government involvement in Lithium Carbonate production. Under this agreement, Codelco’s subsidiary Minera Tarar will merge with SQM unit SQM Salar to create a joint venture, with Codelco holding a majority stake. This new agreement will replace SQM's existing contract with the Chilean economic development agency, Corfo, which was set to expire in 2030. The partnership will commence in 2025 and continue through 2060, with Codelco assuming general management responsibilities starting in 2031. This agreement has also positively supported the Lithium Carbonate market as the concerns regarding the supply situation have eased.

According to the ChemAnalyst database, the prices of Lithium Carbonate are poised to demonstrate further stability backed by a balanced market outlook. Increasing sales in the downstream EV market is anticipated to support Lithium Carbonate prices in the near future.