Australian lithium stocks experienced significant declines Tuesday following President Trump’s announcement of increased tariffs on Chinese exports. Mineral Resources saw the most dramatic drop, falling over 9%, while IGO and Liontown Resources also suffered losses of 3.5% and 3.8% respectively. The market’s apprehension stems from the potential impact on demand for lithium-ion batteries, a key component in electric vehicles exported to the United States.
The imposed tariffs threaten to disrupt the electric vehicle supply chain, potentially reducing Chinese exports to the US and, consequently, the demand for Australian lithium, a substantial portion of which is shipped to China for battery production. This external pressure compounds existing challenges within the lithium market. The global all-in sustaining cost for spodumene fell 14 per cent in 2024, according to S&P Global, compared to 2023.
Furthermore, the restart of lithium mining operations at CATL’s Jiangxi mine, one of the world’s largest electric vehicle battery manufacturers, has contributed to a supply uptick, placing additional downward pressure on lithium prices. The confluence of trade tensions and increased supply creates a challenging environment for lithium producers, particularly those reliant on the Chinese market.
