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China tells EV batterychain it wants 'rational' lithium prices

MON, MAR 21, 2022 - 1:17 PM

[HONG KONG] China istelling its electric-car battery supply chain that it wants lithium prices toreturn to sustainable levels.

The government called in a range of marketparticipants last week - from lithium producers to the main carmakers'association - to discuss "a rational return" for lithium prices,according to a statement from the Ministry of Industry and InformationTechnology late Friday (Mar 18).

Lithium has soared nearly 500 per cent in thepast year, adding to cost pressures for EV producers.

The seminar on Mar 16 and 17 were aimed atdiscussing surging costs and promoting what the ministry called the healthydevelopment of the new-energy vehicle and battery sectors. It also addressedsupply bottlenecks, how lithium is priced, as well as measures to steady pricesand secure supply.

The meeting underscores how Beijing is gettingnervous about lithium's prolonged surge, and it's also in line with a broader pushto manage soaring commodity prices. Earlier, some manufacturers were alsosummoned for a meeting after prices of rare earths jumped.

Lithium has powered through records in Chinaas an acceleration in demand from EV manufacturers outstrips supply. The burgeoningEV industry is grappling with growing risks around cost inflation, with somecarmakers starting to feel the pain and raising their own price tags.

Participants at last week's gathering includedofficials from the China Nonferrous Metals Industry Association, ChinaAssociation of Automobile Manufacturers, China Industry Technology InnovationStrategic Alliance for Electric Vehicles and other organisations, as well askey lithium suppliers, cathode companies and EV-battery firms. BLOOMBERG

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