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Lithium prices have plunged by 75% this year and the rout seems “far from over”, say Yvonne Yue Li and Annie Lee at Bloomberg. The white-coloured metal is a key ingredient in lithium-ion batteries. Excitement about demand for these batteries from electric vehicles (EVs) drove a huge rally during COVID-19. The price of Chinese lithium carbonate leapt by 1,400% between late 2020 and November 2022. But over the past year prices have receded amid signs of a glut.
Shares in US-listed Albemarle, the world’s biggest lithium miner, have plunged by more than 50% in a year. It mines lithium in Chile, Australia and the US. After mining, most of the metal is processed in China, making Chinese lithium prices the industry benchmark.
The sale was due to “a demand for problems that was brewing,” says Barron’s Al Root. On the one hand, automakers have stockpiled steel during the price frenzy, but this has left them with giant inventories that they don’t want to replenish right away. EV adoption continues to grow strongly, with sales up about 50% in the U. S. and Europe year-to-date, and up 20% in China. But this falls short of the even more bullish forecasts made at the height of the value’s rise.
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UBS analysts expect the global rollout of electric cars to be slower than expected, says Étienne Goetz in Les Echos. Electric cars are now expected to account for just 18% of global vehicle sales in 2024, up from 20% in the past. By 2030, this percentage will be 47%, down from 54% in the past.
The analysts cite uncertainty among consumers as interest rates spike, falling government subsidies to buy EVs, and still insufficient charging infrastructure as factors constraining uptake. Lithium supply looks set to outstrip global demand until 2028. The white metal will be under pressure for some time.
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