Lithium may be called “white gold,” but investing in the metal has hardly been a golden ticket lately.

Lithium, which is used to make batteries for both gadgets and electric vehicles, has been on a roller-coaster ride in recent years. Its price skyrocketed in 2021 and 2022, only for a subsequent plunge to wipe out all those gains. Lithium prices are now down nearly 90% from their peak in 2022.

Rising adoption of EVs, especially in China, has pushed up demand, but supply has been ramping up even faster. That, together with slowing EV sales outside of China, has pushed lithium prices down.

With prices having dropped so low, supply cuts seem inevitable as producers are making little profits or even losses. UBS, for example, estimated that current lithium prices are already lower.

Inventory of lithium carbonate, a lithium-based compound used in batteries, in China is still at a historical high level of 130 kilotons, according to J.P. Morgan. And more supply could be coming online, especially if prices start to rise again. Goldman Sachs estimated that supply next year could be 57% higher than demand. Compared with the previous downturn between 2018 and 2020, Chinese lithium producers have more cash, according to UBS, which means they could continue with their expansion plans.