Debacle due to the fall in lithium prices,
Ben Laider comments "that they have fallen 77% in the last year and face an excess of new supply and a slowdown in demand for electric vehicles (EV), a situation that will worsen this year."
DEBACLE: Lithium prices have fallen 77% in the last year, despite its "white gold" nickname, and are at the tipping point of a continuing decline in battery metals, with cobalt down -20 % and nickel -40%.
Lithium has seen a glut of new supply and a slowdown in demand for electric vehicles (EVs). A price reversal may be slow, and miners are under pressure, despite already very bad sentiment, with lithium prices still above pre-2022 levels and above the industry's cost curve.
But it's also a silver lining in competitiveness for battery and EV makers as they try to reignite growth with lower prices. Lithium-ion battery pack costs are 30% of the total for an EV and fell 14% in the last year to $139/kWh.
LITHIUM: The excess supply will deepen this year, and will be equal to more than 15% of the market, with this new supply in the market, while there is a lower than expected growth in demand for EV batteries. This situation is even more aggravated for Australian hard rock spodumene producers who have led the supply increases. This is a low-cost process but offers a lower margin product compared to brine operators in the "lithium triangle" in Latin America.
Everyone has begun to reduce costs and adjust supply plans, but this has a long way to go. Prices remain above the top of the industry's cost curve, pre-2022 levels, and well below long-term contracts, while new direct lithium extraction technology, including new entrant Exxon , can drive new supply.
