Beautiful Virgin Islands

Tuesday, Jun 03, 2025

Electric-car demand pushes lithium prices to records

Electric-car demand pushes lithium prices to records

Driven by a surge in Chinese electric-vehicles sales, the sharp rise in a key commodity for batteries could slow adoption of EVs globally.

Surging prices for lithium are intensifying a race between automakers to lock up supplies and raising concerns that a shortage of the battery metal could slow the adoption of electric vehicles.

Lithium carbonate prices in China, the benchmark in the fast-growing market, stand at about $71,000 a metric ton, according to price-assessment firm Benchmark Mineral Intelligence. That is almost four times as high as a year ago and just below the record set this March in yuan terms.

Lithium is an outlier in commodity markets that have broadly retreated in recent months, reflecting gloom over an economic outlook dimmed by the Federal Reserve’s interest-rate increases and stuttering growth in China and Europe. Brent Crude Oil and copper—commodities used throughout industry and transportation—have fallen about 15% and 7%, respectively, this quarter. Even European natural-gas prices, propelled higher for much of 2022 by Russia’s move to cut supplies, have dropped by 10% over the past month.

Hummer EV are seen on the production line as President Biden tours the General Motors "Factory ZERO" electric vehicle assembly plant, in Detroit, Nov. 17, 2021.


However, lithium keeps rising, driven by a pickup in electric-vehicles sales in China, the world’s biggest market for EVs. Car purchases jumped after Shanghai eased 1COVID1-19 lockdowns in June, juicing demand for lithium-ion batteries. The China Passenger Car Association forecasts six million new EVs will be sold in the country this year, double the 2021 level.

"Lithium is really following the Chinese EV market and that’s just taking off," said Edward Meir, a metals consultant at brokerage ED&F Capital Markets. "This is a preview of what could await us in the U.S."

Draining supplies further, power outages caused by a heat wave in central China curbed output of refined lithium carbonate and hydroxide, which go into battery cathodes. Suppliers in Sichuan province—which has a third of China’s lithium processing capacity—closed factories for several days and ran down inventories to meet their sales commitments, said Rystad Energy analyst Susan Zou.

Workers lower an R1T truck body onto a chassis in the assembly line, April 11, 2022, at the Rivian electric vehicle plant in Normal, Illinois.


In the U.S. and elsewhere, traders and analysts expect demand for lithium to leap in the coming years as the auto industry phases out internal-combustion engines and rolls out electric vehicles. Companies including General Motors Co., Ford Motor Co. and Volkswagen AG are racing to catch up with front-runner Tesla Inc., investing billions of dollars to bring EV factories online.


All have struck deals with lithium producers to lock down scarce supplies. More than 80% of lithium-ion batteries are used for EVs, said Daisy Jennings-Gray, senior analyst at Benchmark Mineral Intelligence. That will rise to 90% in 2030, Benchmark forecasts, from 40% in 2015.

High prices have encouraged companies to embark on lithium projects in Latin America and Australia, the two biggest-producing regions. However, analysts say they will take years to hit full speed and ease the shortage, in part because left-leaning South American governments are angling for greater control over their countries’ natural resources.

Regulations such as California’s tax on lithium extraction are likely to delay mines in the U.S. and Europe, say analysts at Citigroup. Demand will outstrip production by 4% this year, they forecast. Concerns about the effect of lithium mining on water supplies and other environmental worries also have held back efforts to crack open new deposits.

German Chancellor Olaf Scholz, left, talks to Elon Musk, Tesla CEO, at the opening of the Tesla factory Berlin Brandenburg in Gruenheide, Germany, Tuesday, March 22, 2022. The first European factory in Gruenheide, designed for 500,000 vehicles per ye


High lithium prices are a boon for the small group of companies that dominate global supply and have reported surging profits. U.S.-listed shares of Albemarle Corp. have jumped 23% this year, while those of Sociedad Química y Minera de Chile SA have more than doubled. The S&P 500, in contrast, has dropped 19%. Matt Tuttle, chief executive of Tuttle Capital Management, said he is looking to add more lithium stocks to his portfolio, expecting them to continue outperforming the broader index this year.


A big bottleneck is in refining, which converts spodumene and industrial-grade lithium carbonate before selling battery-grade lithium carbonate and hydroxide to cathode makers. China dominates this part of the supply chain. Two big producers in Russia have been shunned by Western companies since President Vladimir Putin invaded Ukraine, reducing global capacity.

"I would like once again to urge entrepreneurs to enter the lithium-refining business," Tesla Chief Executive Elon Musk told analysts in July. "There’s lithium pretty much everywhere, but you have to refine the lithium into battery-grade lithium carbonate and lithium hydroxide, which has extremely high purity. So it is basically like minting money right now."

Elon Musk speaks about Tesla's new batteries at a conference. 


Auto makers and government officials are concerned about the security of supply given the scarcity of material and China’s pivotal position in processing lithium. The Inflation Reduction Act signed into law by President Biden last month sets thresholds for the amount of lithium and other minerals that must come from the U.S. or its free-trade partners for EVs to qualify for tax credits.

In a sign of the dash to buy lithium, a closely watched auction of Australian spodumene—a rock that contains unrefined lithium—fetched a bid of more than $7,700 a dry metric ton on Tuesday. That is equivalent to a production cost of $74,000 a metric ton of lithium carbonate, which would mark an all-time high, according to consulting firm Rystad.

"It’s very competitive," said Kevin Smith, managing director for energy-transition metals at commodity trader Traxys. "Supply is trying to catch up with demand. It’s still not a balanced market."

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
×