Lithium Price Surpasses 200,000 Yuan Milestone as EV Sales Reach New Heights


The price of the key material used to make electric-car batteries has passed the 200,000 yuan ($31,305) milestone in China, continuing a hot trend that has seen the price of the commodity reach record highs as vehicle sales also reach new heights.

As of Thursday, the spot price of battery-grade lithium carbonate was up nearly 360% year-on-year at 200,013 yuan per ton, metal research institute Shanghai Metals Market data shows. On the first day this year for which the institute gives a price, Jan. 4, it was at 53,000 yuan.

Before this year, the record lithium carbonate price was set in 2017 at 168,000 yuan per ton, which was surpassed on Sept. 27.

Record sales of electric vehicles (EVs) in China have driven this trend.

October saw a new monthly high with over 383,000 EVs sold, an increase of 135% year-on-year and 7.2% month-on-month, the latest data from the China Association of Automobile Manufacturers shows.

Skyrocketing lithium prices aren’t likely to stabilize unless the EV industry begins to mass-produce alternative battery technologies or major battery recycling programs are put in place, Li Liangbin, chairman of China’s largest lithium miner, Ganfeng Lithium Co. Ltd. (002460.SZ), told Caixin in a recent interview.

An unnamed lithium trader agreed, saying that major buyers aren’t being put off by the surging prices. The price isn’t likely to decline before February, because manufacturers usually stock up on raw materials during the fourth quarter.

The trend is likely to moderate in 2022 as 403,300 tons of lithium production capacity is on track to be added to total global capacity, Tianfeng Securities Co. Ltd. wrote in a research note. A drop is expected to come in the fourth quarter of 2022, the analysts wrote.

Meanwhile, major players in the new-energy sector are scrambling to secure their access to the crucial metal.

In September, a subsidiary of China’s largest battery producer, Contemporary Amperex Technology Co. Ltd. (300750.SZ), paid $240 million for a 24% stake in the Manono project in the Democratic Republic of the Congo. The same month, the battery-maker announced it would acquire Canada’s Millennial Lithium Corp. for C$376.8 million ($297.7 million) in cash. However, it was eventually outbid by a Canadian rival.

Stainless steel giant Tsingshan Holding Group Co. Ltd. announced in mid-November that it would invest up to $375 million in a South American lithium project as it looks to shift the focus of its business.

In May, Shenzhen-listed Ganfeng bought out London-listed Mexican miner Bacanora Lithium PLC in a deal valued at up to 190 million pounds ($263.2 million) to get access to its Sonora project, which is among the world’s largest lithium clay sites. A Hong Kong subsidiary of Ganfeng spent another $130 million a month later to invest in a lithium mine in the western African country of Mali.

Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

You’ve accessed an article available only to subscribers

VIEW OPTIONS





Read More:Lithium Price Surpasses 200,000 Yuan Milestone as EV Sales Reach New Heights