One of the main forecasts that investors rely on to predict the market price is the current global demand and supply chain. In particular, the price is driven by the demand for two forms of the metal – lithium carbonate and lithium hydroxide. Another factor that affects lithium prices is the rarity of the metal. The London Metal Exchange https://www.forex-world.net/ (LME) works closely with the lithium industry to provide more information, forecasts, charts, and lithium prices to investors. Market prices for lithium have fluctuated dramatically over the past few years as investors have speculated over the supply and demand for lithium in the growing market for electric vehicle batteries.
In the 1790s, Jozé Bonifácio de Andralda e Silva from Brazil discovered petalite on Utö, a Swedish island. This was the first lithium mineral to be found but it wasn’t until 1817 that lithium was identified as a new metal in its own right. Our responsive widgets and charts scale to nearly any display size.
It should also be noted that February 2024 China EV sales YoY growth will potentially be terrible, given Chinese New Year is in February this year compared to January in 2023. This alone might delay a lithium price bottom for a couple of months which ties in with some analysts’ views that the bottom will occur late Q1, 2024 or in Q2, 2024. The chart below shows what happened to iron ore when China accelerated their industrialization and urbanization. We expect orders to start flowing upstream again either towards the end of the first quarter or early in the second quarter. Furthermore Chinese non-integrated lepidolite and spodumene (from Xinjiang) is almost unprofitable, with Chinese brine (from Tibet) also getting close to being unprofitable.
Lithium Price Per Ton / Tonne
Just last week BYD launched the Dolphin Mini (Seagul) in South America starting from US$20,100. In 2022 we saw most EV metals prices surge higher, as EV demand soared (107% in 2021 and 56% in 2022). Then in 2023 https://www.dowjonesanalysis.com/ we saw prices collapse as demand slowed (EVs grew ~30% YoY in 2023), supply surged, and excess inventory was wound down. Of course the EV metals sector is new and very vulnerable to swings in supply and demand.
It is known as a soft substance with the lowest density of all metals (0.534 g/cm3). Investors can draw their own conclusions on what scenario (base case or high case demand) will likely play out. In 2022 we saw what happens when EV demand surges and in 2023 we saw what happens when supply surges.
Back in September 2023 the lithium carbonate spot price was at ~US$21,000/t (blue-dotted line), a price where the Chinese non-integrated spodumene producers were starting to become unprofitable. Lithium is mainly used for energy storage such as batteries for electric vehicles and sustainable energy generation. The price of Lithium is expected to rise substantially in coming years as the world moves further towards using green energy and lower carbon industry. China lithium carbonate spot prices have fallen ~82% from their 2022 high and are now well below the marginal cost of production. This is resulting in severe cost cutting and several mines going into care and maintenance, which over time reduces supply. The Trend Investing group includes qualified financial personnel with a Graduate Diploma in Applied Finance and Investment and well over 20 years of professional experience in financial markets.
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Pregnant women are advised to avoid this substance as it might lead to birth defects. Lithium has a host of side effects when consumed by a sensitive individual or in too large quantities. Symptoms include nausea, tremors, fatigue, dizziness, heart rhythm and thyroid issues, muscle weakness, rashes and confusion. From early on, lithium was used in the medical world as a treatment for physical and psychiatric conditions. In the mid-1800’s it was unsuccessfully used to remedy gout and uric acid calculi. In the late 1800s, it was used to treat mania with such positive results that lithium is still used in psychiatry today.
As the chart shows, CAM manufacturers have been destocking at a fast pace, once battery inventories return to normal level then orders should start to flow upstream again… The commodity remains extremely valuable due to its essential roles in the fields of medicine, technology, and to investors looking to add a sought-after commodity to their portfolio. Two of the world’s major lithium producers are Australia and Chile. China and Argentina also produce the metal to a lesser degree.
- The remaining saline solution is processed to extract the lithium, usually by electrolysis.
- Lithium is the only metal that reacts at room temperature with nitrogen.
- In 2022 we saw what happens when EV demand surges and in 2023 we saw what happens when supply surges.
- One can buy shares in companies that are involved with lithium mining and production.
- Lithium mining produced an estimated 82,000 metric tons of lithium in 2020 and the global reserves in 2021 is at an estimated 21 million tonnes.
- The metal is found in trace amounts in many rocks and mineral water but is more abundant in minerals such as petalite, spodumene, lepidolite, and amblygonite.
When Argentina’s new libertarian president, Javier Milei, announced sweeping reforms, a prominent one was making it easier to export lithium. The U.S. subsequently announced financial support to make that happen. When Namibia conflicted with a Chinese mining company, it was over the export of lithium. After the fall of Kabul to the Taliban, one of the few economic opportunities that emerged was for the export of lithium from the Taliban-ruled Emirate. It does look like we may have hit the bottom, or at least we are very near.
Strong EV demand should drive an EV metals supercycle this decade
Lithium has some substitution risk from sodium-ion batteries (low end EVs & energy stationary storage (~10% of demand could be taken by sodium-ion) and flake graphite from artificial graphite. Substitution may potentially cause the demand numbers below to be a bit lower. Lithium can rarely be obtained by investors in its physical form but the metal can be traded effectively in other ways. One can buy shares in companies that are involved with lithium mining and production.
In Australia, lithium comes from mining ores of other minerals. Chile and Argentina extract lithium from the brine of underwater lakes. The water is brought to the surface and allowed to evaporate. The remaining saline solution https://www.forexbox.info/ is processed to extract the lithium, usually by electrolysis. Lithium has a silvery veneer and is a soft and malleable metal. It has a potent reaction to water and with air, it rapidly oxidizes after being cut.
Johan August Arfvedson of Stockholm analysed the mineral when he realized it contained an unknown metal that was a new alkali and a version of sodium. The metal’s name is derived from the Greek word „lithos” meaning stone. Lithium is a silvery-white metal that resembles aluminium or platinum. On the periodic table, it belongs to Group 1 (Ia) which holds the other alkali metals hydrogen (H), sodium (Na), rubidium (Rb) potassium (K), cesium (Cs), and francium (Fr).
Lithium prices are well below the marginal cost of production in China
Lithium prices currently hover at approximately $13600 a ton as of December 18th 2023. Very strong December 2023 global EV sales should mean that the cathode and battery manufacturers will need to do some restocking, particularly if EV sales growth holds up in H1, 2024. Lithium mining produced an estimated 82,000 metric tons of lithium in 2020 and the global reserves in 2021 is at an estimated 21 million tonnes. Lithium is toxic and ingestion is often done under close medical supervision. Lithium carbonate is prescribed for manic depression (also known as bipolar disorder) and sometimes for lesser grades of depression.
