Lithium Carbonate prices in the U.S. market continue to follow a downward trajectory while entering December 2024, with consistent week-on-week declines observed. The sluggish demand is attributed to cautious battery manufacturers and EV makers amid tightening regulations in key markets like the U.S. and EU. Market players anticipate price stabilization in mid-2025 as supply chains adjust and EV adoption accelerates.

Chile, one of the world's largest Lithium Carbonate producers, has maintained ramped-up production rates to meet rising demand from electric vehicle manufacturers. State-run initiatives aim to expand domestic Lithium Carbonate extraction, but a global glut has led to persistent price pressures. The Chilean government’s collaboration with local communities to enhance the production of Lithium Carbonate has faced delays due to protests, further complicating market dynamics. 

Oversupply remains the dominant factor for the decrease in the price of Lithium Carbonate. Companies such as SQM have reported record-high sales volumes yet suffered from plummeting prices, leading to decreased revenues. The world’s second-largest lithium producer, reported a 73% decline in net profit for the third quarter, amounting to USD 131 million. This drop occurred despite an 18% year-over-year increase in lithium sales volumes. Average lithium prices fell sharply by 67%, driving a 41% reduction in revenue to USD 1.07 billion. Lithium accounted for 42% of the company’s gross profit contribution for the year. 

SQM anticipates selling 190,000 to 195,000 metric tons of lithium in 2024 but warns that pricing pressure on Lithium Carbonate will likely continue to negatively affect average prices in the fourth quarter, according to its latest statement.

The Lithium Carbonate market downturn has disrupted efforts in the West to establish domestic supply chains for critical metals essential to the energy transition. This challenge is compounded by heavy reliance on China, which dominates global refining capacity and lithium production.

In the recent market development, Exxon Mobil and LG Chem have entered a preliminary agreement through a non-binding memorandum of understanding (MOU) to secure up to 100,000 metric tons of Lithium Carbonate over several years. The lithium will be sourced from ExxonMobil’s forthcoming U.S. project to support LG Chem’s cathode production facility in Tennessee, which is projected to be the largest of its kind in the United States. This lithium will be sourced from ExxonMobil's future U.S. project to supply LG Chem’s cathode manufacturing facility in Tennessee, expected to become the largest of its kind in the country.

Although the U.S. Inflation Reduction Act (IRA) provides tax incentives to promote non-Chinese sourcing and domestic production, companies like Albemarle report that these measures have yet to accelerate supply chain development within the minerals sector significantly.

Lithium Carbonate producers are also facing significant barriers, including prolonged permitting processes, labor shortages, and uncertain policy environments. Additionally, analysts warn that policy changes under incoming U.S. President Donald Trump, who has pledged to end electric vehicle mandates and potentially dismantle the IRA, could slow EV adoption and further depress lithium prices. As per the latest assessment, the price of Lithium Carbonate Battery Grade DDP USGC settled at USD 11200/MT in the week ending on 6 December 2024.

According to the ChemAnalyst database, the prices of Lithium Carbonate are anticipated to demonstrate a declining trend in the upcoming weeks due to a lack of consumer inquiries from the downstream sectors.