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Supply for battery metal keeps outpacing rising demand

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Imbalance may persist until at least 2030

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Industry conference focused on cost cutting

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Lithium's future demand seen as solid

By Ernest Scheyder

LAS VEGAS, June 26 (Reuters) - An ongoing slide in

lithium prices even as demand for the battery metal continues to

climb is a frustrating "paradox" not likely to be resolved

before at least 2030, the world's largest producers told a major

industry conference this week.

Once a niche metal used primarily in greases, ceramics and

pharmaceuticals, lithium's use in electric vehicles, large-scale

battery storage and other electronic applications has grown

rapidly, with demand up 24% last year and likely to grow 12%

annually for the next decade, according to data from consultancy

Fastmarkets.

Oversupply from China, however, has dragged prices down more

than 90% in the past two years, fueling layoffs, corporate

buyouts and project delays across the globe.

"We've got market pain, but on the other side is the

strategic gain. That is the lithium paradox," Dale Henderson,

CEO of Australian lithium miner Pilbara Minerals ( PILBF ), told

the Fastmarkets Lithium and Battery Raw Materials Conference in

Las Vegas.

One long-time conference attendee described the mood at this

year's conference using the stages of grief as a metaphor. Last

year's conference reflected denial, with the sentiment in 2025

one of acceptance, he said.

Despite the price drop, attendance at the conference -

considered the world's largest annual gathering of lithium

investors, executives and consumers - fell only 9% from last

year to roughly 1,000, according to organizers.

"It's quite hard to imagine a future where lithium doesn't

play a central role in the global economy," said Paul Lusty,

head of battery raw materials research at Fastmarkets.

Chinese miners have stockpiled supply that likely will only come

down later this decade and lessen the market imbalance, he

added.

Others have seen an even longer timeframe. Project Blue,

another minerals consultancy, does not expect lithium demand to

exceed supply until 2033 at the earliest.

"Lithium has no chill mode. It really is more volatile than a

lot of other markets out there," said Peter Hannah, head of

pricing at Albemarle, the world's largest lithium

producer, which has cut staff and delayed expansion projects in

response to the price drop.

Much of the conference side chatter focused on efforts to curb

spending, with various lithium projects - especially direct

lithium extraction (DLE) projects - touting efforts to lower

costs.

"The issues with lithium are which mines can produce the

highest quality product at the lowest cost," said Ken Hoffman, a

commodity strategist with mining investment bank Red Cloud

Securities.

EnergyX, a DLE developer backed by General Motors ( GM ),

unveiled a study showing it could produce the metal in northern

Chile with operating costs below $3,000 per metric ton. The

estimates are preliminary, but underscore the industry's push to

spend less.

"Innovation is the solution to building a resilient battery

supply chain," said Chris Doornbos, CEO of E3 Lithium ( EEMMF ),

which is developing a DLE project in Alberta.

Adding to the market tension, SQM - the world's

second-largest lithium producer - laid off 5% of its workforce

this week.

"We do have other factors impacting the behavior of the market

participants than just pure economics," Andres Fontannaz,

commercial vice president of SQM's international lithium

division, told the conference, a reference to how electric

vehicles have become a political target in some countries.

The tension is even higher for lithium projects under

construction and hoping prices rise by the time they open.

"This is a really tough industry to be in," said Jon Evans, CEO

of Lithium Americas ( LAC ), which is building North America's

largest lithium mine in Nevada. "It's periods of euphoria

followed by periods of pain and suffering, which we're in now."