Tesla Trauma Shows the Lithium Market Needs a Chill Pill – by David Fickling (Bloomberg News – July 25, 2018)


Isn’t lithium meant to be a mood stabilizer? That’s certainly not what’s happening in the stocks of companies that produce the element used in rechargeable batteries and psychiatric medications. News this week that Tesla Inc. sent a memo to some suppliers asking them for payment rebates to help it become profitable shook shares in lithium miners.

The Solactive Global Lithium Index, in which FMC Corp., Albemarle Corp., and Sociedad Quimica y Minera de Chile SA or SQM have a weighting of about 40 percent, fell as much as 2.1 percent Monday to its lowest level in 11 months. SQM slumped as much as 4.8 percent, while Albermarle dropped 4.1 percent.

You can see the logic behind these moves. Tesla is the big beast of the electric-vehicle market, and electric-vehicle batteries make up the bulk of lithium demand — right?

Wrong. In truth, Tesla probably accounts for around 2 percent of global lithium demand, and companies that many have barely heard of such as Samsung SDI Co. are far more important players.

It’s not hard to do the math. Most types of lithium-ion batteries contain between 70 grams and 90 grams of lithium metal for every kilowatt-hour of energy output

For the rest of this article: https://www.bloomberg.com/view/articles/2018-07-24/tesla-trauma-shows-the-lithium-market-needs-a-chill-pill

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