2023-10-03 15:30:54
Lithium prices are at their lowest levels due to the Chinese economic crises
Lithium prices fell to their lowest level in two years due to concerns regarding strong Chinese demand, which has become the main component in the production of electric car batteries, according to a report on Mining.com, published yesterday evening, Monday.
Lithium carbonate prices in China fell to 166.5 thousand yuan ($ 22,814) per ton, before the holiday last week, a loss of nearly half compared to the last peak reached in early June, when the decline was sharp, and the price reached a record level of 598 thousand yuan per ton. .
Demand for lithium usually rises in the fourth quarter in China, which is the largest market for electric cars in the world, due to strong battery cell production and installation.
Manufacturers usually renew raw materials for making batteries every year, but this year that did not happen.
Susan Zhou, an analyst at the Norwegian research company Rystad Energy, said that a major restocking of lithium has not yet taken place.
She emphasized that battery makers still have plenty of inventory to draw.
For her part, Wani Shao, an analyst at Guatee Junan Features Co., said that lower prices may limit supply, especially from lepidolite mines in China. “It is regarding restocking,” she said, because consumer demand is weaker than expected.
Electric car makers are struggling to defend their market share amid economic uncertainty.
The growth of electric car sales in the Asian country slowed to 37% in the second quarter compared to the previous year, compared to a global average of 50%.
Goldman Sachs Group analysts expect a further decline in lithium carbonate prices over the next 12 months, writing in a note dated September 21: “For the rest of the year, the primary focus appears to be on the seasonal rise in Chinese electric vehicle sales.”
“We believe that any disappointment compared to historical norms might put accelerated downward pressure on prices,” they added.
The current decline in prices provides a good buying opportunity for lithium stocks, as strong demand growth should support prices in the long term.
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