SLAM Exploration Ltd. (TSXV: SXL)
‘Exploring for critical elements and precious metals in New Brunswick, Canada.’
Although lithium prices rebounded to over $11,500 per ton in late November 2025, accumulating a 38% increase in the second half of the year, the market’s weak trend is expected to persist into 2026. Fitch analysis indicates that current prices, while still low compared to historical highs and causing losses for marginal producers, are not yet sufficient to trigger large-scale capacity cuts. In a fragmented and increasingly mature market, production is influenced by a complex interplay of economic, operational, and strategic factors, leaving the short-term outlook uncertain.
Oversupply is anticipated to become the market norm for the foreseeable future. Fitch believes that unless significant and sustained capacity reductions occur, the lithium market will remain oversupplied in 2026. Wood Mackenzie’s forecasts further support this view, projecting that the surplus of battery-grade lithium chemicals will expand to 153,000 tons (in lithium carbonate equivalent) in 2026 and potentially increase to 207,000 tons in 2027. In the short term, due to lagging growth in electric vehicle demand and policy uncertainties, the key to market rebalancing will depend on adjustments on the supply side.
Against this backdrop, lithium-related stocks have shown diverging trends. Canadian lithium developer Standard Lithium (SLI) has seen its stock price surge nearly 250% year-to-date, while larger producers such as Lithium Americas (LAC) and SQM have also recorded significant gains. In contrast, industry giants like Albemarle (ALB) have lagged amid weak lithium prices and sector volatility. The Global X Lithium & Battery Technology ETF has risen 56% year-to-date, partly driven by tariff and trade-related news.
The supply chain is also facing potential impacts from technological changes. Fitch notes that the rapidly evolving battery technology market, including possible lithium substitutes, may erode the anticipated stable demand. Despite new market entrants and strategic partnerships established by governments to secure critical mineral resources, China is expected to maintain its position as the world’s largest end-market (accounting for approximately 64% of total demand) and the dominant processing hub.
The current challenging industry environment also presents opportunities for mergers, acquisitions, and consolidation for well-capitalized large enterprises. These companies are seeking to strengthen their positions through diversification or securing key resources. For instance, Rio Tinto (RIO) has been active in lithium projects and is gradually closing in on becoming one of the world’s top five lithium producers, narrowing the gap with Albemarle and SQM.
