FX.co ★ Lithium Falls Further to 4-Year Low

In May, lithium carbonate prices slumped to a four-year low of CNY 63,500 per tonne as supply continued to surpass demand. According to the China Passenger Car Association, sales of new energy vehicles in China decelerated in April compared to the previous year, and exports experienced a decline, despite ongoing government subsidies aimed at promoting vehicle exchanges and advancements in energy transition technologies. This data aligns with recent observations that China's electric vehicle market has not expanded as rapidly as anticipated following the boom at the start of the decade. This has resulted in Beijing providing subsidies to battery manufacturers, leading to a surge in production and an ensuing surplus of supply. Nevertheless, production levels are not expected to decrease at the same pace as the market because lithium miners are reluctant to cease operations, aiming to maintain market share and business relationships with governments and battery producers. Additionally, top electric vehicle battery producer CATL successfully launched its IPO in Hong Kong, raising $4.6 billion to fund the expansion of new projects.