Column: Lithium supply crunch Part II – this time it’s for real – by Andy Home (Reuters – January 15, 2022)

LONDON, Feb 15 (Reuters) – The lithium supply crunch has arrived in full force. The price boom of 2016-2017, it’s now clear, was just the dry run. This is the real deal.

Back in November 2017 the spot price for battery-grade lithium carbonate in China peaked at 175,000 yuan per tonne. Fastmarkets currently assesses it at 400,000-430,000 yuan, up 47% on the start of the year and eight times higher than it was at the start of 2021.

China’s spot market, where small tonnages can have big price impacts, may be accentuating the scale of the run-up, but it’s no false flag. From mined spodumene to high-purity hydroxide, every component of the lithium processing chain is on a wild price surge.

There is simply not enough of the stuff around to meet demand at the moment. Scarcity of what is a critical input for electric vehicle (EV) batteries could potentially act as a powerful brake on e-mobility, with profound implications for global efforts to decarbonise.

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