Jose Fernandez, the U.S. undersecretary for economic growth, energy and the environment, on Monday accused China of overproducing lithium in a predatory scheme that drives down market prices and drives competing suppliers out of business.
“This is a deliberate response by the People's Republic of China to what we are trying to do,” Fernandez said. said. “They're engaging in predatory pricing, driving prices down until there's no competition. That's what's happening.”
The American government is sink Billions of dollars are being poured into lithium production, with huge hopes being pinned on giant deposits discovered in Nevada and California. Much of the funding comes from President Joe Biden's recently enacted Anti-Inflation Act. admitted It is actually a disguised spending program for green energy development, falsely presented to the American public as an attempt to control high inflation.
Ironically, some of these extravagant subsidy efforts to produce more lithium for electric vehicle (EV) batteries are driven by environmental concerns that oppose drilling new mines or expanding existing projects. blocked by conservationists.
Mr. Fernandes made the remarks during a visit to Portugal, where he also expects production to increase. knock As well as being drilled into a lithium “gold mine”, the company is also in trouble with environmentalists who claim the proposed Barroso Hills mining project will pollute water supplies, erode soil and damage agricultural production. facing.
China is not particularly concerned about the opinions of environmentalists about its mining and industrial operations, and currently produces two-thirds of the world's lithium and dominates the market.
As Mr. Fernández argued, China has certainly been able to use its production advantages to suppress global prices. Lithium prices have fallen 80% over the past year. Part of this decline was directly attributable to China's overcapacity, but also due to a decline in EV demand.
Mr Fernández said Portuguese mining companies were struggling to secure investments and customer contracts due to global price declines caused by China.
“We want to help them and we think we can,” he said. “Lithium mining companies everywhere have to navigate this difficult situation created by predatory pricing.”
industry analyst expect The lithium oversupply situation is expected to continue until 2028, at which point supply could match much lower than expected demand for EV batteries. China's own demand for EVs has declined as well, which is one of the reasons why the country has built up excess inventories due to the ferocious lithium production boom of the past few years.
The Chinese government usually denies accusations of deliberate oversupply and predatory pricing, but on Wednesday China's Ministry of Industry and Information Technology made its first accusations. protected Admission fee This means that excess lithium could flood the market.
China's solution to this problem was a proposal to limit the construction of new lithium-ion factories and ban factories that “simply expand production capacity.” Since China is already the dominant producer, this proposal would have the net effect of locking out emerging competitors from the market and cementing China's position as the king of lithium.
The International Energy Agency estimated on Monday that with billions of dollars in investment, the United States and the European Union could triple their share of the lithium market by the end of this decade, with both countries accounting for around 15%. China will maintain 60%.
