Bayberry Research

Executive Summary

Global lithium demand is projected to exceed supply as early as 2025, driven by rapid EV adoption, grid storage buildout, and policy support.$116 billion in investment is needed this decade to meet expected demand.Permitting delays, refining bottlenecks, and uneven geopolitical access to lithium reserves (especially in Chile, Argentina, Australia, and China) are slowing down production.While lithium prices fell from their 2022 peak, most analysts agree the current lull is temporary and may rebound as inventories are absorbed.

Global Supply & Demand

Global lithium demand is expected to grow 18–22% YoY, driven by EVs and battery storage systems.On the supply side, output from Australia and Chile remains dominant, while China’s processing capacity gives it unmatched leverage. Emerging players like Zimbabwe and Canada are scaling fast but face infrastructure challenges.Key Insight: Global refining capacity will be the key bottleneck in 2025.

Policy Watch

Government interventions will shape market behavior more than ever
China: New dual-use export controls on lithium compounds and equipment
United States: IRA-linked sourcing rules continue to impact buyer strategy
EU: Strategic reserve efforts and ESG disclosure frameworks expandingWatchpoint: Policy timelines may move faster than capital, creating temporary pricing or access mismatches.

Pricing & Forecasts

Lithium carbonate spot prices dropped sharply in 2023, but have stabilized entering 2025.
Most analysts expect prices to remain in the $18,000–$22,000/ton range in H1, with a potential rebound in H2 depending on inventory and policy outcomes.Bayberry Forecast (LCE):
Q1–Q2: $19,200 avg
Q3–Q4: Recovery to $21,500 possible if demand accelerates

Strategic Implications

For buyers, traders, and policy analysts,
2025 is a year of vigilance—not overreaction.
Consider mid-term contracts to hedge against policy-driven disruptions
Monitor refining output, not just mining headlines
Track battery tech shifts that may alter grade or form preferencesTL;DR: Don’t chase the rebound, plan for the pivot.