Slumping Lithium Prices Signal Angst Over China’s Demand Outlook – by Yvonne Yue Li and Annie Lee (Bloomberg News – October 1, 2023)

(Bloomberg) — Lithium prices are spiraling down toward the lowest level in two years on concerns over the strength of Chinese demand for the material, a key ingredient in electric vehicle batteries.

Prices of lithium carbonate in China fell to 166,500 yuan ($22,814) a ton last Wednesday, ahead of the Golden Week holidays, a loss of almost half from the recent peak in early June. The decline has been precipitous. Less than a year ago, the metal reached a record of 598,000 yuan a ton.

The slump has hammered lithium producers too, with the Sprott Lithium Miners ETF tumbling to the weakest since its inception in February, and Global X Lithium & Battery Tech ETF plunging to the lowest since 2020.

Demand for lithium typically picks up in the fourth quarter in China – the world’s largest EV market – because of strong battery cell production and installation, and manufacturers usually replenish their feedstock ahead of that.

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