Lithium at a Crossroads Data Update

Silverado Policy Accelerator’s data update highlights the challenging conditions facing the lithium industry in 2024, with oversupply and low capacity utilization at Chinese refineries putting downward pressure on prices.

Six Key Takeaways from 2024:

Global lithium supply continued to exceed demand in 2024.
Prices declined steadily, reflecting persistent market imbalances.
Australia remained the leading mine producer, but China, South America, and Africa saw notable production growth since 2021.
Most lithium mine exports went to China, reinforcing its role as a global processing hub.
China leads lithium chemical production, though other countries are beginning to scale up.
Chinese carbonate and hydroxide producers operated at low capacity utilization rates, underscoring excess refining capacity.

Silverado Comments on Section 232 National Security Investigation: Critical Minerals

Silverado Policy Accelerator submitted comments to the U.S. Department of Commerce on the Section 232 National Security Investigation of Imports of Processed Critical Minerals and Derivative Products.

Silverado began the analysis by using our Strategic Defense Critical Minerals list, along with a select group of other dual-use minerals, including nickel, cobalt, lithium, and manganese, to identify those most at risk. We then conducted an analysis of how China has distorted global critical mineral markets, using the rare earth element market as a case study.

Drawing on both the identified high-risk minerals and China’s market-distorting practices, Silverado developed a series of targeted policy recommendations.

Key Recommendations:

1. Impose Section 232 Tariffs Only on Critical Minerals Where the U.S. Has Viable Domestic Production Capacity.

2. Apply Regional Value Content (RVC) Thresholds to Downstream Critical Mineral Products.

3. Implement a Phased Enforcement Approach for UFLPA Compliance in Critical Minerals Supply Chains.

4. Implement Preferential Tariff Treatment for Feedstock for Domestic Production of Critical Minerals.

5. Offer Beneficial Tariff Treatment on Foreign Processing Technology and Tax Incentives for Production and Purchases of U.S.-Made Processing Technology Equipment.