A senior U.S. official has accused Chinese lithium producers of engaging in predatory pricing by oversupplying the global market, leading to significant price drops. Jose Fernandez, the U.S. under secretary for economic growth, energy, and the environment, stated that China is producing far more lithium than necessary, intentionally driving down prices to eliminate competition.
Key points include:
China currently produces about two-thirds of the world’s lithium chemical output, primarily used in battery technologies for electric vehicles (EVs).
Lithium prices have plummeted over 80% in the past year, largely due to China’s overproduction and decreased demand for EVs.
The price drop is impacting Chinese companies as well, forcing battery giant CATL to halt production at some mines.
Fernandez emphasized that low lithium prices hinder global supply chain diversification and investment in countries like Portugal, which has significant lithium reserves.
Portugal aims to develop its lithium industry comprehensively, from mining to battery recycling, but is facing challenges due to the current market conditions.
The trade tensions between the U.S. and China are escalating, with the EU also moving to impose tariffs on Chinese electric vehicles in response to perceived unfair subsidies.