Key Insights from the 2025 Lithium Supply and Battery Raw Materials Conference: Addressing Oversupply and Investment Challenges

Five Takeaways from Fastmarkets’ Lithium Supply and Battery Raw Materials Conference 2025
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The 2025 Fastmarkets Lithium Conference in Las Vegas addressed critical issues affecting the battery supply chain, including lithium oversupply, funding challenges, and the necessity for midstream investment. Discussions also highlighted the interdependence with China and the struggles faced by recyclers amid policy uncertainties and market fluctuations. The conference was held from June 23-26, gathering over 1,000 market participants. Here are the five key insights regarding the battery supply chain from this year’s event:

### 1. Lithium Supply Levels Dominate Discussions

With lithium prices nearing four-year lows, concerns about oversupply were a prominent topic throughout the conference. Attendees debated the likelihood of continued market softness, as new supplies from Australia and Africa are entering the market. Additionally, brine expansions in South America contribute to the already oversupplied landscape. While some market participants noted a decline in port stocks of spodumene and lithium salts, they acknowledged that these stocks were decreasing from a high baseline. Estimates suggested that spodumene port stocks in China alone could be around 400,000 tonnes, described by one delegate as “much higher than average.” Another participant commented, “It could take over six months to burn through the inventories.” Despite this, most attendees expressed confidence in the long-term fundamentals of supply and demand, though short-term caution prevailed due to slower-than-expected electric vehicle (EV) adoption in key markets like Europe and the US.

### 2. Funding Squeeze Puts Pressure on Upstream and Midstream Projects

A significant concern shared across the supply chain was the difficulty in accessing capital. Companies ranging from junior miners to midstream converters and recyclers reported challenges in securing funding. Investment for new capacity has become increasingly difficult to attain, as private investors are now more risk-averse, and public markets remain lukewarm on battery raw materials. “Lithium is just no longer attractive for investors,” said one industry participant, reflecting the challenges in accessing capital. While some larger companies with strong balance sheets are proceeding with expansions, others are delaying or shelving their projects, particularly those that depend on third-party agreements, especially outside of China. In Europe, the Critical Raw Materials Act (CRMA) came under scrutiny, with many agreeing that it lacks concrete targets, incentives, and direct financing pathways. Although some companies with ‘strategic’ project designations under the CRMA were present, participants questioned the effectiveness of this label in securing funding. “In some ways, it is just a label; it doesn’t guarantee anything — but it’s better to have the label than not,” remarked another attendee.

### 3. Desire for Interdependence

As Western nations continue to strive for domestic battery supply chains, several speakers acknowledged the ongoing dominance and agility of Chinese firms. The push for greater regional independence has prompted policy responses in the US and EU. However, China remains a crucial reference point for scale, cost-efficiency, and vertical integration. Delegates discussed the need to foster interdependence rather than complete independence, emphasizing knowledge and technology-sharing initiatives with China. Some suggested that learning from China’s deployment strategies and end-market development could help Western players expedite project execution.

### 4. Battery Recyclers Continue to Battle Market Headwinds

Battery recyclers are still facing challenges, including narrow profit margins and a weaker-than-anticipated short-term supply of end-of-life (EOL) batteries. Sluggish EV growth has delayed the availability of scrap, while low metals prices have decreased payables for black mass producers. In the US, policy uncertainties, particularly concerning the Inflation Reduction Act and export regulations, have added complexity. With domestic refining capacity still limited, recyclers remain heavily dependent on international buyers. Perspectives varied on whether China might reopen to black mass imports, with some fearing it could undermine US refining efforts, while others believed that higher black mass prices would encourage investment in new domestic infrastructure.

### 5. US Supply Chain Remains Vulnerable Without Midstream Buildout

The vulnerability of the US battery supply chain was another significant theme. A primary concern is the lack of investment in midstream processing capacity for cathode and anode materials. While government support and private capital have been directed toward mining projects and cell manufacturing, the middle segment of the value chain remains underdeveloped. Speakers highlighted that without increased focus in this area, the US will continue to rely on foreign suppliers for critical processed materials, undermining aspirations for supply chain independence. Many speakers expressed that a policy shift is necessary to attract more midstream investment, especially considering national energy security and emergency preparedness concerns.

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