On Tuesday, lithium mining stocks experienced notable declines following President Trump’s enforcement of additional tariffs on Chinese exports. Mineral Resources’ share price dropped nearly 10% to $21.48, reaching a three-year low. Similarly, IGO and Liontown Resources saw their shares fall by 3.5% and 3.8%, respectively.
The newly imposed 20% tariffs on Chinese goods have raised concerns about a potential decrease in demand for lithium-ion batteries used in electric vehicles (EVs) destined for the U.S. market. As China is a major exporter of EVs, a reduction in demand could adversely affect Australian lithium producers, given that a substantial portion of Australian lithium is exported to China for battery manufacturing.
Compounding these challenges, the lithium market is experiencing downward pressure on prices due to increased supply. Analysts have observed that the global all-in sustaining cost for spodumene has decreased by 14% in 2024 compared to 2023, indicating a growing supply surplus relative to demand.
