2023-11-27 01:03:20
The fall in lithium prices that began a year ago continues. Electric battery metal has lost 75% this year.
Excluding an early spring surge, lithium carbonate, a semi-processed form of the metal, has lost three-quarters of its value this year. In just one month, it fell by 20% and returned to its August 2021 level.
This slide is due, as is often the case, to the combination of two factors: abundant supply versus gloomy demand.
Boom in mining projects
More than 200 lithium projects currently exist, and for around forty of them, the financing needs have already been quantified, according to Patrice Christmann, independent consultant and former director of research and strategy at BRGM, the Geological and Mining Research Bureau.
Several lithium giants have also invested to increase their capacities. This is for example the case of Mineral Resources, the world’s second largest producer of spodumene, a rock source of lithium, which announced its intention to double its production in Western Australia over the next fiscal year, according to tradingeconomics. com.
On the other hand, global needs have not exploded as some had anticipated. Interest rates, which remain high, and inflation still cause great uncertainty over the recovery of the global economy and indirectly over sales of electric vehicles.
Uncertainties about lithium needs
The main market for these cars remains China, where activity is also slowing down. It is also difficult to say what the dynamic of development of sodium batteries will be in the country, knowing that in the spring, the Chinese manufacturer presented its first vehicle equipped with one of these new generation batteries. Last week, it was around the Swedish battery specialist Northvolt announcing that it had also developed a sodium-ion battery. Technological developments that could reshuffle the cards for lithium demand in Europe as well.
Given the oversupply on the market, the world’s second largest lithium producer (SQM) does not rule out seeing prices fall further in the coming weeks. According to consultancy Benchmark Mineral Intelligence, the market could be in surplus until 2028.
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