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US representative claims China conducts unjust lithium trade
(MENAFN) A senior U.S. official has accused China of engaging in unfair trade practices in the lithium market, claiming that the country is deliberately oversupplying lithium to undermine prices and secure a dominant position in the industry. Jose Fernandez, the Under Secretary for Economic Growth, Energy, and the Environment at the U.S. Department of State, made these assertions during a recent visit to Portugal, which is Europe’s largest lithium producer.
Fernandez highlighted that China's lithium production significantly exceeds current global demand, asserting that this surplus is a calculated strategy by the Chinese government. "That is an intentional response by the People’s Republic of China to what we are trying to do with the Inflation Reduction Act," he stated. He characterized China's actions as “predatory pricing,” whereby the nation reduces prices to a level that eliminates competition, thus consolidating its market dominance.
Lithium, essential for manufacturing batteries used in consumer electronics and electric vehicles, is crucial for the transition to a fossil-fuel-free economy. According to the United Nations, lithium is considered a foundational element for future clean energy storage solutions. Despite its importance, the price of lithium has plummeted by over 80% in the past year, primarily due to China’s overproduction and a slowdown in demand for electric vehicles.
Fernandez cautioned that the low prices not only hinder the United States' ability to diversify its supply chains globally but also negatively impact countries like Portugal, which require investment to cultivate their lithium industries. He emphasized that a healthy market for lithium is vital for supporting the development of new technologies and energy solutions, underscoring the need for fair competition in the global lithium market.
As the geopolitical landscape continues to evolve, the implications of China’s market strategies on global lithium production and pricing are becoming increasingly critical, raising questions about the future of supply chains and energy independence in the U.S. and beyond.
Fernandez highlighted that China's lithium production significantly exceeds current global demand, asserting that this surplus is a calculated strategy by the Chinese government. "That is an intentional response by the People’s Republic of China to what we are trying to do with the Inflation Reduction Act," he stated. He characterized China's actions as “predatory pricing,” whereby the nation reduces prices to a level that eliminates competition, thus consolidating its market dominance.
Lithium, essential for manufacturing batteries used in consumer electronics and electric vehicles, is crucial for the transition to a fossil-fuel-free economy. According to the United Nations, lithium is considered a foundational element for future clean energy storage solutions. Despite its importance, the price of lithium has plummeted by over 80% in the past year, primarily due to China’s overproduction and a slowdown in demand for electric vehicles.
Fernandez cautioned that the low prices not only hinder the United States' ability to diversify its supply chains globally but also negatively impact countries like Portugal, which require investment to cultivate their lithium industries. He emphasized that a healthy market for lithium is vital for supporting the development of new technologies and energy solutions, underscoring the need for fair competition in the global lithium market.
As the geopolitical landscape continues to evolve, the implications of China’s market strategies on global lithium production and pricing are becoming increasingly critical, raising questions about the future of supply chains and energy independence in the U.S. and beyond.
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