11:08 AM EDT, 07/18/2024 (MT Newswires) -- The lithium market will remain in surplus in the foreseeable future unless major producers significantly cut supply, Deutsche Bank said in a Thursday note.

The bank expects the growing lithium surplus to last until year-end 2028 before the market could then revert into a deficit in the later years of this decade.

According to Deutsche Bank, the main driver of the surplus is volumes coming out of China, where production has continued to grow and improve in the last 12 months, despite a challenging pricing environment.

On the demand side, electric vehicles remain the main driver.

Deutsche Bank said its demand forecasts are 4% lower in 2024 to 1.03 million tonnes lithium carbonate equivalent, but 1% higher in 2025 at 1.2 million tonnes lithium carbonate equivalent and +3% in 2030 at 2.62 million tonnes lithium carbonate equivalent compared to prior estimates.