HomeMarket NewsStruggling Lithium Industry Hit by Plummeting Prices Amidst Fading EV Demand

Struggling Lithium Industry Hit by Plummeting Prices Amidst Fading EV Demand

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Monday proved to be another dark day for Albemarle (NYSE:ALB) and Lithium Americas (NYSE:LAC) as they led a downward spiral in the lithium market (LIT), closing at -6.3% and -6% respectively. This decline has been spurred by a distressing 20% plunge in Chinese lithium carbonate prices in November and a staggering 75% drop year-to-date.

Sigma Lithium (SGML), American Lithium (AMLI), Livent (LTHM), and SQM (SQM) also saw their values tumble by -3.9%, -3.5%, -2.5%, and -2.2% respectively. These declines have been triggered by a surfeit of supply, wreaking havoc on prices. Benchmark Mineral Intelligence has projected that the global lithium market will not rebound into deficit until 2028, citing high-interest rates and a cloud of uncertainty shrouding EV demand amidst some automakers reconsidering their strategies.

SQM (SQM) has forewarned that the gloomy trend in lithium prices is expected to persist for the rest of the year. UBS analyst Dim Ariyasinghe delivered a grim forecast, highlighting the potential for prices to undershoot expectations due to looming surpluses in the lithium market. However, amidst this stormy outlook, Ariyasinghe also believes that there are countless signals playing out in the lithium market and despite the imminent challenges, opportunities for growth are still likely to emerge.

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