Lithium Supply Cycle: Chemistry Shift, Surplus Mechanics, and the Path to Balance

Lithium carbonate prices fell roughly 90% between late 2022 and mid-2025, bottoming below $9,000 per tonne as Australian spodumene expansions, Chinese lepidolite output, and accelerating African hard-rock supply overwhelmed slower-than-projected demand. The surplus peaked near 175,000 tonnes LCE in 2023 and is set to narrow as curtailments, Chinese mine suspensions, and the effective halving of lepidolite output tighten supply. Demand structure has shifted in parallel: lithium-iron-phosphate now accounts for more than half of EV deployments and the bulk of new utility-scale storage, compressing lithium intensity per kilowatt-hour. The report ranks brine, hard-rock, and direct-extraction projects on the cost curve and sets out where and when the surplus clears, with a return to deficit probable by 2026 on most forecasts.