Greenbushes spodumene mine has been in operation since 1983. Image: Talison Lithium, a Tianqi Lithium and Albemarle joint venture.
Despite the lofty expectations for demand from electric vehicles where lithium-ion batteries dominate, prices for the raw material have been in relentless decline for the last 18 months.
Free-on board prices of lithium carbonate from South American brine ponds are down 27% over the past year to average $11,500 a tonne in June, according to Benchmark Mineral Intelligence data. Ex-works prices in China have collapsed from a peak of $24,750 in March last year to below South America export prices.
Producers in Australia now get $300 less for spodumene concentrate (6% lithium used as feedstock for lithium hydroxide ) cargoes than in July last year, when prices were above $900 a tonne, according to Benchmark’s June assessment. Lithium hydroxide prices followed carbonate down, but now trade at a premium to the latter at over $13,000 inside China.
Thanks to a slew of new hard-rock lithium mines and expansions at existing operations in Western Australia, the country is now the number one producer of the white metal.
New supply coming on stream over the next couple of years – thanks in large part from the expansion of Greenbushes, the world’s largest lithium mine – is also dominated by Australia.
In a new report by Australia’s Department of Industry, Innovation and Science predicts continued decline in the price of lithium hydroxide as spodumene pre-cursor material floods supply chains in China and Europe.
The build-up of stocks worldwide in anticipation of the dozens of so-called gigafactories (named after the Tesla facility in Nevada) being built around the world must be particularly worrying for lithium price bulls.
The office of Australia’s chief economist predicts a 26+% increase in stockpiles worldwide, representing 2-and-a-half years of consumption.
According to the study, the ramp-up in electric vehicle and battery facilities is projected to lift lithium demand from 234,000 tonnes in 2018 to more than 349,000 tonnes by 2021.
Currently, less than half the lithium produced around the world ends up in rechargeable batteries.
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