Lithium buyers are sounding cautious on the key battery metal’s prospects for next year, even after a huge plunge in prices.

Producers have recently been in talks with clients — mostly in Asia — to hash out contracts for 2024. While sales volumes rose in the previous couple of years amid the electric vehicle boom, this time around they look like remaining flat, according to people familiar with the matter who asked not to be identified. Deals are also being discussed at bigger price discounts than last year.

The more somber mood during the talks follows a boom and bust in the market. Lithium prices surged to a record in the two years through 2022 on the back of a buying frenzy. But the metal has crashed about 80% this year in response to a rapid expansion of production and as battery demand began to disappoint.

The consequences of lithium’s slide has been profound for both buyers and sellers. Shares in top producers like Albemarle Corp. and Ganfeng Lithium Group Co. plunged this year, and for now some are producing more than they can sell. For users like Tesla Inc. and Ford meanwhile, the shift to a buyers’ market will bring relief after surging battery prices hurt profits last year — though they’re now facing an ominous slowdown in EV sales.

Until a few years ago, the lithium sector negotiated long-term supply contracts at fixed prices. That changed as large price swings created cost headaches for battery firms and automakers. That prompted a shift to annual agreements struck in a similar way to other metals like copper during a “mating season,” with deals inked at premiums or discounts to a measure of spot prices.

Lithium talks, which tend to last from November until year-end, are still ongoing. Supply volumes being discussed are little changed from a year ago, according to the people with knowledge of some of the negotiations.

Those deals are also being discussed at discounts of roughly 5% to 10% to an index of spot prices, the people said. That compares with smaller discounts agreed last time and premiums the year before that. Some of the discounts being proposed might only apply to supplies for part of next year and may still change.

Asia is by far the top lithium buyer. Annual contracts account for a large amount of purchases made by most South Korean, Japanese and Chinese users.

Lithium prices are now at their lowest since 2021, a stark turnaround from last year when the auto industry fretted about long-term shortages. With new production coming onstream to overwhelm demand, users have enough inventories to tap and aren’t under pressure to lock in supplies — especially as some EV makers rethink their growth plans.

While some analysts have said lithium’s rout is nearing an end, a sharp turnaround appears unlikely. Global battery demand is forecast to grow 38% next year, down from an estimated 53% this year, according to Rystad Energy.