In China, the price of lithium carbonate fell to 166,500 yuan ($22,814) a tonne last Wednesday, nearly half the price it was at its peak in early June. Less than a year ago, the metal reached a record of 598,000 yuan a tonne in China. Weak consumer sentiment has stalled demand for lithium, a key component of electric vehicle (EV) batteries.

China is still the world’s largest EV market, and demand for lithium usually picks up in the fourth quarter as strong battery cell production and installation prompt manufacturers to replenish their lithium stocks in preparation.

According to Susan Zhou, an analyst at Rystad Energy, sizeable restocking in preparation for the fourth quarter is yet to materialise, and battery makers still have enough stock to see them through.

Jordan Roberts, lithium analyst at price reporting agency Fastmarkets, said: “There has been persistent weakness in China. The market is waiting to see the impact from reduced electric vehicle subsidies and is concerned by low household confidence, which is tied to the country’s property crisis.”

Due to depressed consumer confidence, EV sales growth in China slowed to 37% in the second quarter from a year earlier, while the global average was 50%, according to Counterpoint Research.

 The price fall comes amid Western concerns over China’s control of global lithium supply. At the International Energy Agency’s critical minerals summit last week, US Energy Secretary Jennifer Granholm said the world is facing a dominant supplier of critical minerals willing to exploit its position for political gain. Earlier in September, European Commission President Ursula von der Leyen said China had “flooded” global markets with artificially cheaper electric cars due to excessive state subsidies.