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Battery-grade lithium carbonate forecast to trade at $74K/tonne in 12 months

Trading Economics global macro models and analysts expectations forecast battery-grade lithium carbonate to trade at 504,813 CNY (US$74,000) per tonne in 12 months time. Lithium is expected to trade at 484,185.00 by the end of this quarter.

Lithium carbonate prices in China rose slightly to 480,500 yuan/tonne in mid-August, remaining close to the record-high of 500,000 from March and 400% higher year-on-year as soaring demand drove expectations of extended supply deficits.


Source: Trading Economics.

Shanghai Metals Market data pointed to a supply deficit of 1,361 tonnes in July, swinging from the supply surplus in the prior month as the re-opening of the Chinese economy and cash subsidies for new energy vehicles lifted car manufacturer’s demand. In the US, demand for new energy vehicles is set to increase as the newly passed “Inflation Reduction Act” extends tax breaks for new electric vehicle purchases—although eligibility for the tax break will be determined by the sourcing of critical materials, including lithium. (Earlier post.)


Lithium carbonate is forecast to trade near its high. Source: Trading Economics.

According to the USGS, global end-use lithium markets are estimated as follows: batteries, 74%; ceramics and glass, 14%; lubricating greases, 3%; continuous casting mold flux powders, 2%; polymer production, 2%; air treatment, 1%; and other uses, 4%.

Lithium consumption for batteries has increased significantly in recent years because rechargeable lithium batteries are used extensively in the growing market for electric vehicles and portable electronic devices, and increasingly are used in electric tools, and grid storage applications.


Source: Statista

The only lithium production in the United States currently is from one brine operation in Nevada. Two companies have produced a wide range of downstream lithium compounds in the United States from domestic or imported lithium carbonate, lithium chloride, and lithium hydroxide.

Excluding US production, worldwide lithium production in 2021 increased by 21% to approximately 100,000 tons from 82,500 tons in 2020 in response to strong demand from the lithium-ion battery market and increased prices of lithium. Global consumption of lithium in 2021 was estimated to be 93,000 tons, a 33% increase from 70,000 tons in 2020.



Not long time ago many said that batteries prices will go down as they sell more, it's the opposite. Better adopt hydrogen.


Gorr, your comment reveals that you have absolutely no clue how a free market functions. Even if the price for raw lithium drops, does by no means implicate that the price of batteries will drop accordingly.
Presently, demand for EVs worldwide is soaring and as long as demand remains high, prices will remain as they are or more than likely even increase. No manufacturer is a member of a welfare organization; they're sole interests lie in maximizing their profits. Only, once a saturation of the market has been reached can you expect prices to drop. Presently, it's harvesting time.


Both yoatmon and Gorr are right in part. Lithium is a pure commodity that displays significant price demand elasticity. The market sets the price so that 100% of produced lithium is sold. The current high price encourages the development of new sources of lithium (mines). These will take time to come on-line and during this time prices will remain high. However when new lithium enters the market prices will fall - often sharply until new uses are found for it and the price rises. In the long term if enough low costs sources of lithium are found then the price will fall. A good example is the cost of wheat that fell strongly in Europe after sources were found in the USA.

This is a property of all commodity markets and that will include hydrogen which also requires capital investment. Interestingly unlike lithium which is found in few countries hydrogen only requires energy to produce and so is less complex geo-politically.

It should be noted the lithium and hydrogen fuel cycles both require the use of other 'rare' metals that are both economically and politically important.

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