Lithium Producers Remain Optimistic Despite Price Drop

The world's leading lithium producers expressed confidence in long-term demand for electric vehicle (EV) battery materials at the Fastmarkets Lithium Supply and Battery Raw Materials Conference in Las Vegas. This optimism comes despite a significant price drop that has led to layoffs and delayed expansions.

Lithium demand has surged over the past decade, moving beyond its niche uses in ceramics and pharmaceuticals. However, an oversupply from China and slower-than-expected EV adoption rates have caused lithium prices to plummet by more than 80% over the past year.

The conference, which attracted around 1,100 attendees, highlighted a cautious optimism that the industry can meet the expected demand increase later this decade. As EVs and battery storage technologies become more prevalent, industry leaders are focusing on the fundamental business outlook rather than short-term price fluctuations.

Patrick Howarth, head of Exxon's lithium division, announced expansion plans in Arkansas and emphasized the company’s commitment to long-term fundamentals, undeterred by current low prices. Fastmarkets data indicate that U.S. demand for lithium will grow by 29% annually through 2030, with significant increases expected globally.

Ashley Zumwalt-Forbes, the U.S. Energy Department's deputy director for batteries and critical materials, highlighted the critical role of minerals like lithium in the future energy landscape. She encouraged more companies to apply for U.S. government grants supporting the critical minerals supply chain.

Despite recent layoffs from companies such as Lake Resources and Albemarle, industry leaders urged a focus on long-term growth. Dale Henderson, CEO of Australian lithium miner Pilbara Minerals, advised maintaining perspective on the industry's future trajectory.

Global lithium mine supply exceeded 1 million metric tons last year and is projected to more than double by 2026, driven by expansions in Africa, China, and Australia. However, producers cautioned that sustained low prices could hinder supply availability.

Sarah Maryssael, chief strategy officer for Arcadium Lithium, stressed the importance of measured responses to price changes to meet market demand. Albemarle, the world's largest lithium producer, acknowledged current price concerns but outlined plans to auction its lithium supplies and expressed confidence in future demand growth.

Eric Norris, head of Albemarle's energy storage business, reiterated his confidence in the long-term demand for lithium, whether in the U.S. or elsewhere.