FX.co ★ Lithium Eases from 2-Year High

Lithium carbonate futures were priced at CNY 150,000 per tonne, slightly below the peak which marked a two-year high. This adjustment comes as markets reassess the impact of limited supply and increased demand driven by significant investments in power storage among leading economies. The Chinese government reduced export rebates for battery manufacturers starting in April, prompting companies to accelerate their lithium purchases. At the same time, China's increased investment in datacenter infrastructure and the announcement of heightened power storage funding have bolstered the outlook for lithium and other battery metals. Additionally, Beijing's statement to double electric vehicle charging capacity to 180 gigawatts by 2027 further supports the demand for lithium-intensive energy storage solutions. Concurrently, officials announced the cancellation of 27 mining permits in Jiangxi, a key lithium hub, as part of China's ongoing anti-involution efforts. On the demand side, the United States' prospects are bolstered by new legislation that establishes a $2.5 billion reserve for critical minerals, including lithium.