The High Price Of Lithium Is Pushing A Global Scramble For The Precious Battery Metal: Supply shortages have pushed battery-grade lithium prices to record…
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The High Price Of Lithium Is Pushing A Global Scramble For The Precious Battery Metal:
Supply shortages have pushed battery-grade lithium prices to record highs as battery demand soared amid strong global electric vehicle (EV) sales.
Lithium is a key metal in EV batteries and is widely used in the form of lithium carbonate and lithium hydroxide, both raw materials for EV batteries.
The two main types of EV batteries are nickel-cobalt-manganese (NCM) and lithium iron phosphate (LFP).
Data from the
London Metal Exchange and price reporting agency
Fastmarkets , weekly lithium hydroxide (a minimum of 56.5% LiOH2O battery grade) cost, insurance and freight (CIF) prices jumped to $81.55 a kilogram ($81,550 a tonne) on 1 May, up 23.4% from $66.09 ($66,090 a tonne) on 8 March.
Being a relatively small metal market by trading volume, lithium does not have a futures market.
The LME partnered with Fastmarkets in June 2019 to launch a reference price based on the weekly physical spot trade index on a CIF China, Japan and Korea basis.
As China, Japan and Korea are the biggest markets for the seaborne lithium market, the lithium spot price in those regions is regarded as the industry benchmark for battery-grade lithium.
The rising cost of lithium carbonate has placed a financial strain on battery manufacturers who are seeking to secure supplies of the essential raw material.
Early transactions in 2022 indicate that prices may continue to rise, reflecting a chronic under investment in supply between 2018 and 2021.
Investors are keenly supporting the expansion of supply by providing funding for new lithium projects especially in Africa with huge new lithium projects like the AVZ Minerals Limited Manono Lithium Project taking off in earnest.
But the time lag to production may not immediately address the current tight supply in the market.
Learn more about the lithium rush in my article below and connect with me for more about Africa's contribution to the green energy revolution.
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