Chinese Lithium Slumps 10% After EU Deal Slashes Hybrid Exports Annie Lee Lithium futures in China slumped as the agreement to limit hybrid car exports to the European Union weighed on demand prospects for the battery material. The EU said China had agreed to slash millions of hybrid vehicle sales to the bloc. While the deal will help stave off a trade war, it’s another blow to a lithium industry that saw prices shed a quarter of their value last month.
The market plunged again on Monday, with the most-active contract on the Guangzhou Futures Exchange closing 10% lower at 104,740 yuan ($15,649) a ton. The industry has been pummeled in recent weeks by concerns about demand from electric vehicles as well as larger-scale energy-storage systems. The mineral’s supply-demand balance is shifting in a bearish direction, according to Goldman Sachs Group Inc. The bank forecast last week that both the Chinese and global market will move from a deficit to nearly balanced in the fourth quarter, followed by surpluses in the next two years.
It blamed softer underlying growth in the EV and ESS sectors and less need to build inventories. China’s hybrid car exports to the EU had risen in part because they escaped the tariffs imposed by Brussels on EVs in 2024. In August, Chinese brands accounted for about a quarter of European hybrid sales.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing