In May, lithium carbonate prices reached a four-year low of CNY 61,500 per tonne as supply continued to surpass demand. This downward pressure on prices is attributed to increased lithium production in countries such as China, Indonesia, and the Democratic Republic of Congo. According to estimates from the International Energy Agency (IEA), lithium supply increased by 35% last year. Production is anticipated to keep rising as mining companies avoid halting operations to preserve their market shares and maintain their business relationships with governments and battery manufacturers.
Meanwhile, the growth in sales of new energy vehicles in China decelerated from the previous year in April, and exports also declined, as reported by the China Passenger Car Association. This occurred despite ongoing government incentives promoting vehicle exchanges and energy transition technologies. Recent trends indicate that China's electric vehicle (EV) market has not developed as rapidly as anticipated following the boom at the beginning of the decade. Consequently, Beijing's subsidies for battery producers led to a production surge, resulting in an oversupply.
