Refining the Future of Energy – Right Here in Teesside

Lithium markets remain volatile. While short-term disruptions like CATL’s mine shutdown in August caused price spikes, the structural picture is unchanged: demand is growing faster than bankable refining capacity, especially in Europe. Supply is increasing, but financing and qualification hurdles mean only a fraction of announced projects will reach production.

Pricing Trends

• Lithium Carbonate: Peaked at 85,000 yen/t in mid-August after the CATL shutdown, now back to ~73,500- 74,000 yen/t as restart news calmed the market. (Figure A)
• Lithium Hydroxide: Regained a premium over carbonate, reflecting ongoing demand from high-nickel cathode producers
• Spodumene: Prices remain week ($800-950/t) as oversupply persists, but discounts to carbonate suggest converters are capturing most margin.

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Demand Outlook

• Global demand is rising ~17.5% y/y in 2025, adding nearly 200,000 tonnes LCE.
• EVs remain the dominant driver, with larger batteries for longer-range vehicles boosting intensity.
• Energy Storage Systems (ESS) are accelerating, particularly in China, but carry inventory risk.
• Chemistry mix: demand is increasing for LFP/LMFP, raising carbonate demand. Hydroxide demand remains strongest in Europe for high-nickel batteries.

Supply Side

• SC Insights highlight that Final Investment Decisions have collapsed, financing is a bottleneck.
• Outside China, refining capacity remains scarce. Europe still only has two operating lithium refineries.

Strategic Implications for TVL

• Feedstock flexibility is crucial: SC insights stress that technical-grade and off-spec products are increasingly traded on negotiated discounts. TVL’s ability to process varied intermediates is a competitive edge.
• Refining Gap in Europe means bankable projects like TVL are strategically positioned to serve OEMs demanding secure local supply.
• OPEX discipline: Benchmarking shows TVL’s costs globally competitive (Figure B).
• Market Timing: With large defects expected from 2027 onwards, TVL’s production start date aligns with the tightening market. (Figure C)

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 United Kingdom

• Critical Minerals Strategy: The government is finalising its updated strategy, expected to expand on incentives for domestic refining, highlight recycling, and set clearer targets for battery supply chain resilience.
• Energy Cost Relief: The BritishIndustry Supercharger Scheme is being expanded, aiming at cutting power pricesfor energy-intensive industries. This could materially lower refining OPEX.
• Planning & Permitting: Thegovernment continues to signal support for “fast-tracking” strategic projects.

European Union

• Battery RegulationImplementation: the EU’s recycled content requirements are now in force,mandating rising levels of lithium, cobalt, and nickel in EV batteries by 2031.
• Refining Gap: Despite many announcements, only two lithium refineries are currently operating in Europe. SC Insights wants Europe will still be a net importer of lithium chemicals and cathode materials by 2027-29.
• Strategic Projects: EU policymakers have released which lithium conversion projects qualify as “strategic” under the Net Zero Industry Act.

China:

• Mine Licensing Risk: CATL’s Jiangxi mine shutdown in August, caused by license expiry, immediately spiked global prices before reopening expectations calmed markets. This highlights theregulatory risk premium attached to Chinese supply.
• Export Controls: Authoritiesare still reviewing export approvals for certain battery technologies, thoughlithium chemicals remain largely unaffected.
• Strategic Direction: China continues to dominate refining capacity, with > 50% global share, but policyemphasis is shifting to environmental compliance and consolidation of smaller,higher-cost converters.

Takeaways:

• UK is moving toward cost reliefand strategic recognition for domestic refining.
• Europe has ambitious regulationbut lacks sufficient financed capacity.
• China continues to dominaterefining but faces regulatory risks that create global volatility.
• TVL represents one of the mostcredible solutions to reduce exposure to China, meet EU compliance, and anchor UK industrial strategy.