On Tuesday, lithium mining stocks experienced notable declines following President Trump’s enforcement of additional tariffs on Chinese exports. Mineral Resources’ share price dropped nearly 10% to $21.48, reaching a three-year low. Similarly, IGO and Liontown Resources saw their shares fall by 3.5% and 3.8%, respectively.
The newly imposed 20% tariffs on Chinese goods have raised concerns about a potential decrease in demand for lithium-ion batteries used in electric vehicles (EVs) destined for the U.S. market. As China is a major exporter of EVs, a reduction in demand could adversely affect Australian lithium producers, given that a substantial portion of Australian lithium is exported to China for battery manufacturing. ?
Compounding these challenges, the lithium market is experiencing downward pressure on prices due to increased supply. Analysts have observed that the global all-in sustaining cost for spodumene has decreased by 14% in 2024 compared to 2023, indicating a growing supply surplus relative to demand. ?
