Experts Anticipate Long-Term Volatility in the Lithium Market

Lithium, a crucial component in electric vehicles (EVs), seems to be the metal of the season. Indeed, over the past month, the market has seen loads of fresh developments around lithium pricing. Lithium mining and lithium battery usage have also been effected. Moreover, sector experts anticipate that lithium prices will continue to be volatile over the next two years. A primary factor in this prediction is the increased flow of investment intended to boost lithium mining capacity.

Meanwhile, litihum-ion market prices continue to experience major ups and downs. They touched new highs in November 2022, then began a long slide down that lasted more than half a year. This volatility is the result of many market factors. Geopolitical dynamics like China’s majority control of the rare earth market have played a major role in volatility. There is also the imposition of sanctions on key lithium suppliers from Russia because of the Ukraine invasion.

Stay posted on shifts in lithium price trends and other industrial metals with MetalMiner’s weekly newsletter.

Lithium Battery Demand Not Enough to Stave Off Volatility

From late March onward, lithium prices declined significantly. This was due to China cutting down its consumption because of inventory corrections. That said, prices continue to remain above their long-term average. After experiencing a remarkable two-year rally, Chinese spot lithium carbonate prices underwent a sharp reversal in early 2023. In fact, the spot price of lithium carbonate witnessed a staggering 70% slump between November and its lowest point in April.

The previous rally had propelled Chinese spot lithium carbonate prices to increase tenfold, creating a super-charged market environment. Meanwhile, analysts attribute the subsequent price drop to changes in market dynamics, supply and demand imbalances, and external influences impacting the lithium industry. Clearly, the sudden slump in Chinese spot lithium carbonate prices raises questions about the market’s stability.

India Meets with Australia, France Partners with Mongolia

Countries around the world, including the U.S and India, continue to seek new lithium supplies because of the rapidly-expanding EV market. Indeed, it’s one reason why Indian Prime Minister Narendra Modi met Executive Chairperson of Hancock Prospecting Georgina Hope Rinehart on his Australia visit earlier this week.

Hancock Prospecting is a privately owned mineral exploration and extraction company founded by Georgina’s father, Lang Hancock. While details of the meeting are still unknown, media reports continue to speculate about a new deal between India and Australia in the mining and minerals sector.

While the Indian Prime Minister was busy wooing an Australian rare earths company, his French counterpart, President Emmanuel Macron, visited Mongolia. This was a first for any French head of state, and it represents a huge step forward for both countries.

Mongolia, located between Russia and China, has vast coal, copper, and other rare earth minerals deposits. According to this news report, Macron’s visit to Mongolia focused on rare earth mineral cooperation with France, specifically “the extraction and trade of rare earth minerals used in key tech, including lithium.

Stop obsessing about the actual forecasted metal price. It’s more important to spot the trend. Read why.

Ford Secures Supplies of Lithium Battery Raw Materials

While the U.S., Australia, China, and India jockey for space in the lithium mining sector, U.S. carmaker Ford recently reached a series of supply agreements for lithium battery parts. On May 22, the automotive manufacturer announced partnerships with industry leaders Albemarle, SQM, and three other developers. Experts anticipate that the deal will ensure a consistent supply of the silvery-white metal, which is crucial for powering EVs.

During an investor event held on Monday, Ford disclosed that its overall costs were $7 billion higher than its rivals. Representatives said this was primarily the result of vehicle complexity and the inefficiency of suppliers in its traditional engine-vehicle business segment. The company refers to this part of its production line as “Ford Blue,” according to a report in the Financial Times.

The strategic move to secure lithium supply deals underscores Ford’s commitment to tackling cost challenges and streamlining its operations. This should go a long way toward enhancing the company’s competitiveness in the rapidly evolving EV market.

MetalMiner’s free MMI report gives monthly price trends for 10 different metal areas, including copper, stainless, aluminum and precious metals. Sign up here.