By Tony Sage, CEO of Critical Metals
Lithium prices in China fell sharply as weaker electric vehicle sales and rising geopolitical tensions clouded near-term demand expectations. A slowdown among major Chinese EV manufacturers, including a significant year-on-year contraction in sales from industry leaders, has weighed on sentiment. At the same time, escalating tensions in the Middle East risk softening demand in one of the fastest-growing regions for battery energy storage systems.
However, the broader structural picture could limit downside risk over the longer term. Global lithium demand is projected to expand by roughly 25% this year. The surge in battery deployment underscores this trend with more than 300 GWh of new energy storage capacity added in 2025, with further acceleration expected in 2026. The rapid expansion of lithium iron phosphate (LFP) batteries, now dominating global market share, reinforces underlying consumption growth.
On the supply side, Zimbabwe’s unexpected suspension of raw lithium exports introduces potential tightness, particularly if the ban persists. While short-term volatility may continue, especially if EV demand remains uneven, the medium-term outlook for lithium remains anchored by accelerating electrification and energy storage adoption worldwide.