Lithium Market in Flux: What Happened in Q3 2025

The global lithium market had quite the roller coaster ride in Q3 2025. Prices crashed to a four-year low at the end of June, then bounced back hard in July, hitting an 11-month peak of US$12,067 per ton on August 21. But it didn’t stick — by quarter’s end, lithium carbonate had retreated to US$11,185.89. Pretty typical for a market driven by sentiment right now.

The Rumor-Fueled Rally

That August spike? Turns out it was mostly hype. Traders got excited over whispers that Australian lithium giants like Mineral Resources and Liontown Resources might cut production. Both companies quickly denied it. Even if they had, analysts say it wouldn’t have moved the needle much. The real problem: lithium is swimming in oversupply.

There’s another issue weighing on sentiment — US policy uncertainty. Trump’s plans to roll back EV tax credits and trim the Inflation Reduction Act spooked investors. While it might trigger a brief rush in EV purchases before September 30, the medium-term outlook has turned bearish. Adding to the mess: China’s new fair competition policy and the fresh export restrictions on battery tech hitting the market in November.

Supply Boom Outpacing Demand

Here’s the core problem: lithium mine output has exploded 192% since 2020, jumping from 82,000 metric tons to 240,000 metric tons by 2024. Demand? Not even close. Global EV sales hit 17 million units in 2024 and should top 20 million in 2025, but that 22% surge in supply last year created a glut that’s still dragging prices down.

Industry watchers at Fastmarkets’ recent conference warned this imbalance could persist until 2030. Prices will likely stay under pressure unless new projects get delayed, mines close, or demand surges faster than expected — probably not happening until after 2030.

China’s Curveball

Some temporary support came from an unexpected source: CATL shut down its massive Jianxiawo lepidolite mine in Jiangxi after its operating permit expired on August 9. The halt removed roughly 65,000 metric tons of lithium carbonate equivalent (about 6% of global supply) from circulation, sparking a brief bullish rally.

Then China escalated. In October, Beijing rolled out strict new export controls on advanced lithium-ion batteries, cathodes, and synthetic graphite — effective November 8. This isn’t a ban, but it requires export licenses and approval processes. Since China controls over 70% of global cathode production and 95% of synthetic graphite, this move could ripple across the entire supply chain, especially hitting US manufacturers who import roughly two-thirds of their lithium batteries from Chinese suppliers.

US Doubles Down on Domestic Supply

Meanwhile, Washington is making serious moves to build homegrown lithium capacity. In October, the Trump administration handed out the first US$435 million of a US$2.23 billion loan to Lithium Americas, bankrolled by the Department of Energy. The money supports the Thacker Pass project in Nevada — set to become the western hemisphere’s largest lithium source.

Phase 1 will churn out 40,000 metric tons of battery-grade lithium carbonate annually — enough for roughly 800,000 EVs. The DOE also scored warrants for a 5% equity stake in Lithium Americas and its GM joint venture. Pretty clear signal: Washington is serious about cutting Chinese and Australian dependencies.

What’s Next?

Analysts are cautiously optimistic heading into 2026. Strong appetite for spodumene (hard-rock lithium) persists despite cheap prices, while lepidolite supply remains tight. The big wildcard: when does CATL restart its Jiangxi mine? If it fires up next month, short-term prices could dip. If it drags to early 2026, prices might stay elevated a bit longer.

Bottom line: Q3 showed us a market caught between oversupply today and potential tightness after 2030. Price sentiment swings on rumors, geopolitics matter more than ever, and the US-China supply chain split is accelerating fast.