Lithium’s next leg: Brazil rises, North American brines scale, policy headwinds ease
Signals are turning for lithium. Pilbara warns Australia is losing competitiveness to Brazil on costs and permitting. In North America, Prairie Lithium breaks ground on what it calls the region’s largest DLE plant, while the Smackover JV files a high-grade Texas resource and targets multi-phase scale. Meanwhile, a one-year easing of US-China trade frictions lowers near-term policy risk. Prices have already firmed: October spodumene and China LCE rose MoM. The next leg hinges on execution of DLE and Brazil ramp-ups.
Prices & momentum.
October’s spot indicators turned higher: spodumene 6% cif Asia rose to $970/t (+17.6% MoM) and battery-grade lithium carbonate ex-works China averaged ¥76,750/t (+4.9% MoM).
Brazil’s competitiveness story.
Pilbara Minerals’ CEO says operating in Brazil’s Minas Gerais is currently easier than at home—from power costs (A4–5c/kWh in Brazil vs A10–20c/kWh in WA) to enabling infrastructure—warning Australia risks ceding its upstream edge without action on ports and energy. The implication for medium-term supply is clear: capital and talent will chase lower delivered-cost tonnes.
North American brines: from pilots to scale.
Prairie Lithium began construction in Saskatchewan, targeting four commercial-scale DLE columns with deliveries by April 2026—leveraging de-risking from commercial-scale sorption columns proven in Arkansas. In parallel, Smackover Lithium (Standard Lithium–Equinor JV) filed a maiden inferred resource of ~2.16 Mt LCE at 668 mg/L for the Franklin project in East Texas—among the highest reported brine grades in North America—and outlined a path to >100 ktpa lithium chemicals via phased build-out.
Policy risk: a tactical truce, not a peace.
Beijing has temporarily suspended parts of its export-control regime (including certain graphite and battery-related materials) and lifted approval holds on some dual-use items for one year. In the US, the 10% reciprocal tariff on Chinese goods was extended, but additional escalations were paused. Net: near-term friction reduced; structural decoupling intact.
Why this matters now. With project finance and qualification cycles still long, price discovery will continue to be headline-sensitive. The combination of Brazil’s faster permitting and North American DLE scaling adds credible non-China supply—supportive for spodumene and LCE into 2026 absent a demand shock.
Outlook: Bullish-to-neutral. Seasonal restocking and policy easing support prices; execution risk around DLE and any EV softness cap the upside. Watch Brazilian ramp updates and Smackover pilot-to-commercial milestones.