Understanding the market dynamics of lithium prices

The market is closely monitoring lithium price movements and Autocar Professional attempts to gauge what the near future will hold for EV companies as they contend with more price fluctuations for 2023.

Lithium-ion, a key component in electric vehicles has seen a lot of fluctuation in market prices, which have dropped to CNY 2,05,000-2,46,000 a tonne, versus the highs of CNY 6,00,000 witnessed in November 2022. Lithium carbonate prices rose past CNY 190,000 per tonne, rebounding for the first time since plunging to the 19-month low of CNY 165,500 on April 24, as per data from Trending Economics. Market factors have been exacerbated by geopolitical factors, with China controlling around 60 percent of rare earth minerals, according to the International Energy Agency, and sanctions imposed against Russia, which is amongst the key suppliers of lithium products. Harin Kanani, MD Neogen Chemicals said that lithium prices were stable for a long period of time, but recently in last two years they increased significantly - due to increasing shift and demand for EVs. However, after reaching a peak last year - last one-two months, due to lower consumption from China due to inventory corrections, prices reduced significantly from their peak, but they are still above their long-term average.