The country suspends lithium energy storage

Should the United States invest in lithium?

With lithium, for example, the United States could invest in processing capacity for hard rock lithium ore from Australia and lithium-containing brines from Latin America. China prefers these over its own lower-quality resources that are costlier to process.

What if China flooded the lithium market to drive out competitors?

The lithium data also indicates that when prices were coming down, capacity continued to grow, but capacity utilization declined. If China had been flooding the market to drive out competitors, one would have expected an output surge to be associated with increased processing capacity utilization.

How has China's capacity for refining lithium changed over time?

During this same period, the capacity for refining lithium in ROW has grown at an AAGR of approximately 10 percent, consistent with the decline of its share from 56 percent to 24 percent (Figure 1). Thus, while ROW roughly doubled capacity for refining lithium, China’s capacity increased 7.5 times.

How much lithium is produced in China?

China’s domestic production of lithium at the extraction stage has been in the range of 15–24 percent of the global total during the period 2011–2023 (Roskill Information Services 2020a, 2020b; USGS 2012–2024). Extraction of lithium occurs largely from two types of deposits—so-called surface brine and hard rock.

Is China withholding lithium & cobalt supplies from the market?

Our analyses of lithium and cobalt price trends suggest that China is not withholding supplies from the market as a whole, but this does not rule out price discrimination to favor domestic over foreign customers for refined battery minerals.

How did market power affect lithium production?

The exercise of market power would have entailed restricting output, especially while prices were rising, to further increase them, thereby extracting more economic rent. The lithium data also indicates that when prices were coming down, capacity continued to grow, but capacity utilization declined.