In the final quarter of 2023, the global production of key battery metals largely declined, contrasting sharply with lithium’s output surge. According to S&P Global Market Intelligence, lithium production tripled compared to the same period the previous year, reaching 93,000 metric tons and pushing annual output to more than double of 2022’s total at 316,000 metric tons. This increase in supply led to a significant drop in lithium prices, with lithium carbonate CIF Asia falling to $19,500 per metric ton by the end of December, marking a 38.1% decline from the quarter’s start and a 70.7% decrease from early 2023.
The decrease in demand for battery metals, coupled with an oversupply in the market, prompted lithium producers to cut back production at the beginning of 2024 in an attempt to stabilize prices. Despite these efforts, the initial outcomes have been less than favorable. However, prices have shown some stabilization since the year’s start, indicating a shift in market dynamics due to the increased cost structure.
Other battery metals like cobalt and nickel also experienced production cutbacks in the fourth quarter due to reduced demand, particularly from the electric vehicle sector. Cobalt production saw a 13.8% decrease from the previous year, with Glencore reducing its output to manage the oversupply. Nickel production decreased marginally by 5.7% year over year, as miners responded to market pressures from inexpensive Indonesian nickel.
Conversely, copper experienced a slight uptick in price towards the end of the year, attributed to tightening supply and disruptions in mine supply, despite facing headwinds from weak demand and a stronger US dollar. Production of copper fell by 4.9% compared to the previous year.
Graphite prices also took a significant hit, with the cost of spherical graphite exported from China dropping by 48.1% year over year in December, as internal competition within China exerted downward pressure on prices. 
