Lithium ore price rise suppresses energy storage

Why are Lithium prices so high?

Lithium prices have risen significantly in recent months to new record levels. This follows several years of low prices due to oversupply. It is likely that prices will remain high for some time as supply growth lags behind demand growth. Lithium is produced from brine or from hard-rock ore.

Is a lithium shortage putting the energy transition at risk?

A shortage of lithium salts essential for producing batteries for mobile devices and electric vehicles is putting the energy transition at risk. Over the past 18 months, the prices of lithium carbonate and lithium hydroxide have risen at absurd rates, and the squeeze has only accelerated since the beginning of this year.

Why did Lithium prices go down?

Up to 1995, lithium supply was stable and demand grew slowly. With the market entry of SQM, higher supply resulted in rapidly falling trade prices. From 1999 to 2002 prices as well as demands stagnated because of the Asian economic crisis and the recession in North America.

Is lithium recycling a viable solution to the lithium crisis?

Nevertheless, lithium recycling is promising in addressing the long-term challenge and is expected to meet approximately 50% of total lithium demand by around 2050. 10 In summary, there exists little indication of a continuous high lithium price, even if the reliance of batteries on lithium is consistent.

Will lithium demand skyrocket in the next few years?

Although the demand is projected to skyrocket in the next couple of years, lithium production is forecasted to only increase by 2–5% with currently operating lithium mines and brine operations (Department of Industry, Innovation and Science of Australia, 2019a).

How will eV and utility storage companies respond to the lithium crisis?

Back then the lithium price plunged from over $17,000 per tonne in 2015 to about $8,000 in 2018, then bounced around until the beginning of last year. EV and utility storage manufacturers could, hypothetically, respond by contracting ahead for the four or five years’ lead time needed for mining investments.