Recently, multiple large-scale lithium salt projects have been put into operation one after another.

Ganfeng Lithium announced that its Goulamana spodumene project in Mali, Africa, will officially start production on December 15, 2024, with a planned annual production capacity of 506000 tons of lithium concentrate; Tesla announced that its large lithium refinery located in Texas, USA, has broken ground. It is reported that Tesla has invested over 1 billion US dollars (approximately 7.3 billion RMB) in the factory; Salt Lake Corporation also stated that it currently has an annual production capacity of 40000 tons of lithium carbonate, and the newly launched 40000 ton lithium salt integration project is being promoted.

Lithium carbonate is the core raw material of the lithium battery industry, which has a significant impact on the cost of battery cells. The trend of lithium prices not only affects the profits of upstream material companies, but also has an impact on the selling price of terminal battery cells and even vehicles. Based on the fluctuation of lithium prices, various measures have been introduced in the industry, such as the launch of lithium carbonate futures varieties by Guangqi, the signing of long-term agreements for lithium carbonate, and the rebate mechanism launched by CATL.

With the above-mentioned projects being put into operation, it will also affect the supply and demand relationship of lithium carbonate in 2025.

From 2022 to 2024, with the increase of lithium carbonate production projects, the overall supply and demand relationship has shifted from tight balance to oversupply.

According to data from the Ministry of Industry and Information Technology, from January to October, the production of battery grade lithium carbonate was 540000 tons, a year-on-year increase of 43%; Compared to the same period, the total production of lithium batteries from January to October was 890GWh, a year-on-year increase of 16%. The supply of lithium carbonate continued to exceed the downstream demand growth.

Gaogong Lithium Battery previously analyzed that the explosive growth of the new energy industry in the past few years has driven large-scale expansion of the upstream and downstream industrial chains. Due to factors such as environmental impact assessments and production line construction, lithium mining projects have been relatively slow in the construction cycle, which has also led to a tight balance in lithium carbonate supply in the past, coupled with increased stocking by downstream manufacturers, driving up the trend of lithium prices.

With the completion of lithium mining projects, 2025 is becoming a year of concentrated production of lithium carbonate.

According to data from the Chilean Copper Industry Council, 22 new lithium mining projects will be put into operation in 2025, with an additional 500000 tons of lithium carbonate equivalent. It is expected that the production of lithium carbonate will be 1.59 million tons by 2025, with a demand of 1.4 million tons, and the excess supply of lithium carbonate will expand to 190000 tons.

At present, both upstream and downstream battery and material companies have reached a consensus on the trend of lithium prices. Based on the increase in lithium carbonate supply and the resource recycling brought by battery recycling, the long-term downward trend of lithium prices remains unchanged.

However, from the perspective of the supply structure of lithium carbonate, it still provides support for the price of lithium carbonate in the short term.

According to market data, spodumene production accounts for 50% of global lithium carbonate production, while salt lake lithium extraction accounts for 30%. In 2025, over 70% of the newly added lithium salt projects will come from hard rock lithium mine projects, which also means that ore based lithium mines are still the main source of lithium carbonate supply.

The cost of lithium ore is mostly at the level of 50000 to 70000 tons per ton, which is higher than the cost of extracting lithium from salt lakes of 20000 to 30000 yuan per ton. As of December 17th, the spot price of domestic battery grade lithium carbonate was reported at around 75000 yuan per ton.

Under the current widening supply of lithium carbonate and the impact of lithium mining costs, it is expected that the price decline of lithium carbonate will be limited in 2025.