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Why Weak Lithium Prices to Persist in Early Q3 2024

Asian lithium prices are expected to stay weak in the first half of Q3 2024 due to oversupply and new import tariffs on Chinese electric vehicles (EVs) by the US and the EU. Lithium prices in China are projected to range between Yuan 80,000-90,000/mt ($11,022-$12,799), while prices in North Asia are likely to remain soft due to a seasonal summer lull and ample supply. 

A potential turnaround may occur in the latter half of Q3, a peak season for lithium demand.

Oversupply and Seasonal Lull Pressure Lithium Prices

According to S&P Global data, Chinese lithium prices began Q2 at Yuan 100,000-114,000/mt but fell to a 3-year low of Yuan 80,000-90,000/mt in June due to weak downstream demand and increased production. 

Chinese lithium prices in Q2

Moreover, China’s EV sales in Q2 increased following government subsidies for replacing polluting vehicles. However, new US and EU tariffs on Chinese EVs may dampen future sales in these regions.

Despite better-than-expected EV sales in China in June, US tariffs on Chinese EVs will rise from 25% to 100% in August. Meanwhile, the EU has imposed provisional countervailing duties of up to 47.6% on Chinese EV imports.

The EU has raised concerns about the state support China provides for electric vehicles that are exported to the bloc. The region argues that this constitutes unfair subsidization, giving Chinese EV manufacturers an unfair competitive advantage. And thus, the imposition of higher import tariffs on Chinese EVs as the EU seeks to protect its domestic automotive industry.

EU tariffs on Chinese EVs

Supply pressure intensified as more lithium projects became operational and salt lake production levels rose in China, resulting in a 30% increase in lithium salt output and significant increases in lithium carbonate and hydroxide imports. 

Platts assessed lithium carbonate at Yuan 85,500/mt and hydroxide at Yuan 79,000/mt on July 19, down over 20% from the start of Q2.

Upstream, spodumene prices began Q2 at $1,100/mt, peaking at $1,200/mt before falling below $1,000/mt by quarter’s end. The cost of producing spodumene exceeded the lithium carbonate price, resulting in negative margins and limited interest among lithium converters.

Spodumene prices need to fall below $800/mt for favorable margins in Q3. Platts last assessed spodumene at $920/mt FOB Australia on July 19, down 20% since the start of Q2.

How Do Lithium Miners Respond?

With lithium prices at three-year lows and no signs of recovery, the focus is shifting to whether miners will cut back on the battery metal’s supply. 

Benchmark Mineral Intelligence predicts a 32% supply growth in 2025, surpassing the expected 23% demand increase, with the surplus peaking in 2027 before a deficit returns later in the decade.

lithium demand and supply market balance

While some smaller producers have already reduced output, the larger firms may soon consider shutting mines and delaying projects in regions like Australia and Chile.

Some smaller players have already responded to the price slump. Australia’s Core Lithium halted operations at its Finniss project. 

Core Lithium, which opened its mine near Darwin in October 2022, experienced rapid growth but was hit hard by the subsequent market downturn. CEO Paul Brown noted the severe commodity cycle’s impact, with the company halting production six months later and laying off over 300 employees. 

Core Lithium is now in “care and maintenance” mode, awaiting a market recovery with a $15 million stockpile of processed lithium products yet to be sold and a cash balance of $87 million.

Similarly, Zhicun Lithium Group in China is putting two carbonate units into maintenance.

According to S&P Global Commodity Insights report, sustained low prices could trigger further mine supply cuts and project delays. Recent data from Platts shows spodumene prices nearing levels that previously led to production cuts.

Chinese lithium giants Ganfeng and Tianqi reported preliminary net losses in the first half. On the other hand, Pilbara Minerals plans to expand output after reporting it has “achieved or exceeded” its full-year guidance across production volume, unit operating cost, and capital expenditure. The Australian miner recorded record production in the June quarter.

The Perth-based group produced 725,000 tonnes, surpassing Pilbara’s FY24 guidance range of 660,000 to 690,000 tonnes. This production level reflects a 17% increase compared to the previous year.

When is The Turning Point?

Despite minimal profit margins, some producers maintain output to keep skilled workforces, avoid restarting costs, and preserve buyer relationships. Other lithium miners face growing pressure to reduce production. 

Linda Zhang of CRU Group noted diminished profit margins in Brazil, Chile, Argentina, and Australia. Curtailments and project deferments are expected to peak next year, potentially tightening the market balance in the medium term, according to Zhang.

With hopes fading for a significant demand rebound this year, BloombergNEF recently lowered its EV sales estimates, indicating the auto industry is falling behind in decarbonization efforts.

With supply still exceeding demand and slow EV sales growth, analysts do not foresee a near-term price recovery. They predict that while EV adoption will eventually increase lithium demand, yet the record prices of 2022 are unlikely to return. The industry must now adapt to a more sustainable operating environment, favoring low-cost producers.

The post Why Weak Lithium Prices Will Persist in Early Q3 2024 appeared first on Carbon Credits.

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The Strategic Case for Nature-Based Carbon Investments

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Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.

1. Define the sourcing problem before choosing a project

Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.

This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.

CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.

2. Develop nature-based carbon investments around the actual supply chain

The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?

Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.

Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.

The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.

3. Compare the proposal with other ways to protect supply

WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.

The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.

The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.

The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.

4. Establish what the carbon outcome could count toward

Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?

Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.

SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.

For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.

Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.

5. Build a financial case that survives weaker assumptions

Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.

Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.

Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.

A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.

6. Fund a pilot with a clear expansion decision

Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.

Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.

Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.

This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.

Discuss a sourcing opportunity with CCC

Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.

Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.

Sources

  1. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
  2. World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
  3. Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
  4. United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
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How to buy plastic credits, and what to check before you do

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A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.

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EU carbon credit claims after 27 September 2026

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EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.

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