Lithium Industry: Supply and Costs Outlook

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Demand for lithium from battery manufacturing skyrocketed 500% over the last decade, largely driven by accelerated electric vehicle growth. Lithium carbonate hit peak price of US$21,500/tonne, during October 2017, but has since been reducing back towards US$13,000/tonne.

However, the average contract price of Sociedad Quimica y Minera de Chile SA's (SQM) and Albemarle Corp.'s operations (two of the largest lithium mining companies) on the Salar de Atacama in 2018, were up 25% year over year, compared to a 4% drop in the yearly average spot price.


   

Source: S&P Global Market Intelligence 

The lithium carbonate produced by each operation have different chemical properties, and attract either a premium or discount. Different shipping locations and the contract negotiation strategies of each lithium mining company will also affect lithium pricing. Pricing in the lithium sector should be viewed on a product-by-product basis, with spot prices giving valuable insight on trends but not viewed as an absolute price.

Understand how lithium production costs shape pricing,
and review lithium supply and costs outlook:

  • Sources of lithium
  • Lithium exploration
  • Lithium cost curves
  • Supply outlook
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