Although they don't have quite the pricing power in lithium that they have in rare earths, the Chinese can jack the price around. In rare earths they have so much market share and such cartel-like control that they can and have drooped their prices below foreign cost-of-production and thus destroyed most of the competition. One of the keys to that control is owning the entire supply/fabrication chain. As noted last month:
They aren't that rare. Just hard to find in the right proportions of the different rare earth elements. And in concentrations high enough to make extraction a paying proposition.
And requiring some technical expertise to fabricate into end products. It's not as if there are neodymium magnets just laying around.
And the headline story from Reuters via Mining.com, February 28:
Rare discounts offered by Chinese battery giant CATL to automakers have accelerated a plunge in lithium prices, and the market is set to drop a further 25% with supply growth outpacing demand, analysts and traders say.
After a frenzied rush by electric vehicle makers to secure raw materials over the past two years, which drove prices for lithium carbonate up more than six-fold and spodumene up nearly ten-fold, the bubble has burst.
“Supply is coming on stream faster than you can say ‘boo’,” said analyst Dylan Kelly of Ord Minnett in Sydney.
“Demand remains strong but prices have been unsustainable for some time now.”
The turning point for lithium prices came late last year as electric vehicle demand in China slowed sharply ahead of Beijing’s planned halt to subsidies for the $87 billion industry, the world’s biggest and fastest growing.
The slide steepened, analysts say, as investors were spooked by a drop in China’s January electric vehicles sales and by CATL’s discount terms, which included an assumption that prices of lithium carbonate, a key component in auto batteries, would more than halve.
But even as demand worries have rocked markets, it is the looming supply from China, Australia and Chile that will bring prices back down to earth, analysts say.
Rystad Energy sees the global market deficit of lithium shrinking to around 20,000 to 30,000 tonnes of lithium carbonate equivalent (LCE) this year, from 76,000 tonnes LCE in 2022....
....MUCH MORE
Recently:
- "Lithium Stocks Crashed. Now We Know Why. What It Means for Tesla, EV Battery Stocks"
- "Lithium's Plunge Is Pitting Cathie Wood Against Sector Veterans" (ALB)
- "Lithium Bonanza: China Battles West for Raw Material of the Future"
- "Vulcan Energy to mine 60% more German lithium than planned"
- "OPEC Cartel Has Nothing on China’s Clean-Energy Monopoly"
- "Risk and Reward in South America’s Lithium Triangle"
- Batteries: "Red-hot lithium price rally cools as China’s BYD flags surplus"
And hundreds more, use the 'search blog' box, upper left, if interested
