US Department of Defense cancels US$300 million lithium procurement tender to replenish key mineral stocks

The Zhitong Finance App learned that the US Department of Defense cancelled the bid to purchase lithium for strategic reserves, once again highlighting the challenges it faces in increasing the supply of key minerals. According to an announcement issued by the US Department of Defense Logistics (DLA) on Monday, the agency cancelled its previous tender plan to purchase nearly 36 million pounds (about 16,000 tons) of battery-grade lithium carbonate, with a contract amount of up to 300 million US dollars. DLA did not state the reason for cancelling the tender.

The procurement plan was initially released on July 2, 2026, and aims to include lithium in the US National Defense Strategic Reserve through a five-year fixed-price contract to reduce critical mineral supply risks. The tender was originally scheduled to close on July 17 and has since been postponed twice.

In order to drastically reduce dependence on China, a major supplier, critical minerals have become a political priority for the United States. According to reports, the Trump administration announced the launch of a key mineral reserve plan in February this year, with a total scale of 12 billion US dollars. The plan aims to establish strategic reserves of key minerals such as lithium, nickel, and rare earths to ensure supply chain security for the new energy, chip, and defense industries. More than 10 companies, including GM and Boeing, have participated.

So far this year, the price of lithium carbonate used in electric vehicles and energy storage systems has soared by nearly 20% in China, and prices are still fluctuating sharply. On Tuesday, the main contract for lithium carbonate futures reached a maximum of 141,300 yuan. CITIC Construction Investment believes that with the peak demand season in the second half of the year, the lithium carbonate supply gap is expected to gradually widen.

DLA, which is responsible for managing defense material reserves, cancelled a tender to purchase cobalt last year. Cobalt is a metal used in the battery and aerospace industries.

Before the US stock market on Tuesday, the lithium sector strengthened. Sigma Lithium (SGML.US) rose more than 4%, Lithium Americas (LAC.US) rose more than 2%, US ALB.US (ALB.US) rose nearly 2%, and Chile Mining & Chemical (SQM.US) rose nearly 1%.