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.
They search the globe for great investments with a focus on trending and emerging themes. The current focus is on electric vehicles, the EV metals supply chain, stationary energy storage and AI. Lithium is vital because of its indispensability in modern green technologies, especially advanced batteries. Countries in the developing world have been able to tap into vital new revenue streams even as the price of lithium was pushed downwards. Fears over another crash, current capital losses, and a lack of production increase even when input prices are at rock bottom may stymie efforts to increase lithium production for years.
Will the EV metals have a supercycle from now to 2037 or 2040?
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 https://www.forex-world.net/ 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.
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 https://www.forexbox.info/ 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.
Metal Prices & Charts
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.
- The September 2023 chart below from Macquarie shows the various Chinese lithium producers cost of production.
- Substitution may potentially cause the demand numbers below to be a bit lower.
- The U.S. government was so worried about the metal’s price and its impact on advanced technologies it enacted a comprehensive supply review.
- Lithium carbonate is prescribed for manic depression (also known as bipolar disorder) and sometimes for lesser grades of depression.
- EV makers, including Tesla TSLA , were scrambling to buttress their own lithium supplies.
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.
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.
Lithium demand vs. supply
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 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.
The China lithium carbonate spot price has been stabilizing since December 7, 2023 and this past 2 weeks has bounced higher from CNY 95,500 to CNY 97,500. This price crash should remind everyone that green energy is just as susceptible to market forces as its competitors in the fossil fuels industry. On balance, this is an overwhelmingly positive thing, as the maturation of green energy has made solar electricity cheaper than coal and created large, moneyed constituencies interested in the success of green energy. Besides being used extensively in the medical and psychiatric fields, lithium also offers vast applications in other areas.
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 (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.
Unfortunately for all, this vision has been interrupted by some of the perennial enemies of the orderly market – human greed and poor planning. Just over a year ago, lithium prices were sitting at nearly $80,000 a ton in December 2022. The U.S. government was so worried about the metal’s price and its impact on advanced technologies it enacted a comprehensive supply review. EV makers, including Tesla TSLA , were scrambling to buttress their own lithium supplies. Lithium sellers such as Ganfeng Lithium, the Albemarle Corporation, and others were so swamped with orders they were holding auctions, which routinely pushed prices upward.
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.
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.
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).
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 https://www.currency-trading.org/ 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.