ShreeMetalPrices: Lithium Carbonate Prices Fall Back to Earth as Grand Supply hits to Weak Demand


The introduction of new types of lithium-ion batteries and a lack of Chinese assistance for the market for electric vehicles (EV) could reduce demand for lithium globally. Last year, China stopped offering incentives to the EV auto industry, which lowered battery demand. Large stocks caused battery manufacturers to reduce capacity and sell inventory at a discount.

In addition, a reserves in Iran has recently been discovered with 8.5 million tonnes of lithium, or 10% of the world’s existing reserve. Lithium Carbonate, a crucial raw element, saw a price reduction of 50% in expectation of a decline in demand and an increase in supply. The major reason of the sharp drop in pricing is this.

  1. The 4th quarter of last year saw a significant increase in the production of renewable power vehicle firms. And the price reductions of fuel-powered vehicle will temporarily restrain the growth of new power vehicle to some extent. Even though overall sales increased, NEV inventories grew from Jan to Feb.
  2. The delivery taking of batteries by manufacturers will slow down to different degrees when the price of lithium decreased. To lower safe stockpiles, battery companies has postpone delivery taking and CAM purchases as well as lithium salt purchases by CAM plants. The decrease in current demand across all linkages has been exacerbated by market pessimism.
  3. The demands for the new electric vehicle industry normally improves dramatically in the third and fourth quarters. Which is the silver lining. The need for energy storage is anticipat to continue expanding at a fairly rapid rate. Hence, demand should gradually increase in expectations of lithium carbonate stable as a result of cost support. Moreover, end-user battery deliveries and pickups will eventually resume.