Been reflecting on how 2024 played out for lithium, and honestly it was a rough year for the market. The lithium price per ton basically got crushed throughout the year, dropping from around US$13,160 in January down to US$10,254 by December. That's a brutal 22 percent decline, and the culprit was pretty straightforward: too much supply, not enough demand.

The oversupply situation didn't come out of nowhere. Global mine supply has been ramping up steadily over the past few years. Back in 2020, annual production sat at 82,500 metric tons, but by 2023 that more than doubled to 180,000 MT. So you've got all this lithium flooding the market while demand struggles to keep up. S&P Global is forecasting a global surplus of around 33,000 metric tons of lithium carbonate equivalent in 2025, which is actually better than 2024's projected 84,000 MT surplus, but still not great. They're expecting the lithium price per ton to average US$10,542 in 2025, which is lower than 2024's US$12,374 and nowhere near 2023's US$40,579.

What caught my attention was how the market actually responded midway through. Prices started climbing in February and hit a year-to-date high of US$15,969.26 on March 14, driven by announcements that some new projects were getting delayed and operations shifting to care and maintenance. Producers were finally feeling the pain and cutting back, but analysts noted it would take 12 to 18 months for those supply cuts to really show up in the numbers.

The M&A activity in 2024 was absolutely wild. You had Livent and Allkem merging to create Arcadium Lithium with a US$5.5 billion market cap. Then Rio Tinto swooped in with a US$6.7 billion all-cash bid to acquire Arcadium, which would make them the third largest lithium producer globally. Pilbara Minerals grabbed Latin Resources for US$369.4 million to get their hands on the Salinas project in Brazil. Sayona Mining and Piedmont Lithium announced a merger valued at US$623 million. Lithium ended up being one of the most active M&A segments in critical minerals, with US$24 billion in total deal value from 2020 to 2024. It's pretty clear that major producers with cash were hunting for deals while junior companies were desperate to sell in a tough market.

On the EV side, things got interesting too. Early in the year, North American sales were weak, but Asia was holding up. Then late Q3 and Q4 picked up momentum. China hit a monthly record of 1.2 million EV units sold in October, up 6 percent month-on-month. EV sales from January to October were up 24 percent compared to 2023. But there's all this political uncertainty now with talk of dismantling key components of the Inflation Reduction Act, particularly that US$7,500 EV tax credit. If that goes away, it could really hurt domestic EV adoption.

Then you've got the trade tensions. The US sharply increased tariffs on Chinese EVs to over 100 percent. Canada followed with their own 100 percent tariff on Chinese EVs in August, plus a 25 percent surtax on Chinese steel and aluminum. China filed WTO complaints over it all, calling the measures protectionist. It's a messy situation that's adding uncertainty to the whole lithium market.

Looking ahead, analysts expect the low-price environment to stick around even with the production cuts and project delays we saw in 2024. Macquarie is forecasting mine supply growth of 24.7 percent in 2024 and 17.4 percent in 2025, which means prices probably need to stay depressed longer to rebalance things. The lithium price per ton likely stays under pressure unless something major shifts with demand or we see even more aggressive supply cuts.