Lithium Prices Still on Rise in 2021

Benchmark mineral Intelligence recently released an assessment that showed how the price of lithium had risen significantly in China, driven by the heavy demand for lithium iron phosphate (“LFP”) batteries.

Benchmark, which is a battery supply chain research and price reporting agency, found that the mid-March midpoint price for battery-grade lithium carbonate had increased by 88% since the start of 2021 to more than $12,600/ton. This is the highest level recorded since March 2019.

In its new report, the agency reveals that some transactions were completed as high as $13,400 with signs of a market shortage showing as suppliers run out of inventory. August 2018 was the last time lithium carbonate in China sold for more than $13,000.

While a moderately deep discount to carbonate continues, the price of lithium hydroxide in China has also improved this year, increasing by over 20%. At the start of 2018, the prices of carbonate and hydroxide peaked at $23,000 and almost $25,000 per ton, respectively. However, these prices went into a steady decline then hit rock bottom at the end of 2020.

China controls 60% of global lithium refining capacity and processing and an almost equal percentage of cathode manufacture.

Earlier in February, George Miller, a lithium analyst at Benchmark, had stated that the demand for low-cost, improved and durable LFP cathode material had been renewed in China, noting that this was similar to lithium’s 2016 last price run but with a better product for 2020.

Last year, Tesla, an electric vehicle manufacturing company, shocked the electric vehicle industry when it reported that some Model 3s which were manufactured in its factory in Shanghai would be fitted with LFP batteries that had been manufactured by Contemporary Amperex Technology, a Chinese technology and battery manufacturing company.

Data obtained from Adamas Intelligence shows that despite not being sold in the United States, the 55 kilowatt-hour LFP-battery Tesla Model 3 made up 5.9% of worldwide electric car sales, with regard to battery capacity deployed. This was in December, which made it its second month of full sales, recording 47%.

Amplified by the deliveries made to Europe, this model made up 46% of all Model 3 sales at the start of this year and a surprising 32% of the battery capacity in all LFP-fitted vehicles globally.

Adamas, which tracks the demand for electric vehicle batteries by capacity, cell supply and chemistry in more than 90 countries, found this improved LFP’s share of the worldwide battery market in January. The company found that capacity had increased to 18.5%, up from 3% in June 2020 and 1% in January 2020.

Lithium isn’t the only metal enjoying a sustained bull market. In fact, the price of gold has climbed to record-setting levels, and companies such as GoldHaven Resources Corp. (CSE: GOH) (OTCQB: GHVNF), which are in the thick of extracting this metal, are set to reap the profits that come with high market prices for gold.

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2021/08/24
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