What’s new: The price of lithium, the key material for making electric vehicle batteries, soared to a record high in China reflecting strong demand and tight supply.
The spot price of battery grade lithium carbonate climbed to 605,000 yuan ($83,700) a ton Friday, more than double the price at the beginning of the year, according to data from Wuxi Stainless Steel Electron Exchange Center.
Lithium prices are hovering around historical highs this week as battery makers race to supplement inventories ahead of projected production cuts during the winter in Qinghai, the biggest lithium mining province.
Brokerage Guotai Junan estimated that monthly production at Qinghai’s Salt Lake will decline by 30% during the winter months due to weather. Lithium prices are expected to rise at a faster pace in the fourth quarter than in the third as demand remains high.
The context: Lithium prices have been on a robust upward track since 2021, powered by the global EV boom. The price soared from less than 70,000 yuan a ton in early 2021 to more than 200,000 yuan at the end of the year and remained above 500,000 yuan before April 2022, when a massive Covid lockdown in Shanghai delivered a hit to the auto industry.
After a short period of decline, lithium prices regained steam in the third quarter as auto sales recovered in China, the world’s largest EV market. In September, China’s EV sales reached a record 708,000 units, up 93.9% year-on-year.
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