FX.co ★ Lithium Falls Further to 4-Year Low

Lithium carbonate prices dropped to a four-year low of 60,500 CNY per tonne in June, driven by supply exceeding demand. Increased lithium production in China, Indonesia, and the Democratic Republic of Congo intensified selling competition, with the International Energy Agency (IEA) reporting a 35% surge in lithium supply last year. Production is expected to continue increasing as miners avoid shutting down operations to maintain market share and preserve relationships with governments and battery manufacturers. Concurrently, the growth in sales of new energy vehicles in China decelerated from the previous year in April, and exports decreased, according to the China Passenger Car Association. This occurred despite ongoing government subsidies aimed at promoting vehicle exchanges and energy transition technologies. Recent trends suggest that China's electric vehicle (EV) market has not expanded as rapidly as anticipated following the significant growth at the start of the decade, leading to Beijing's subsidies for battery manufacturers. This policy resulted in a substantial increase in output and an oversupply in the market.