Treasure Chest: A Bottom For Lithium?

Treasure Chest | Feb 05 2024

FNArena's Treasure Chest reports on money making ideas from stockbrokers and other experts. Can lithium prices fall any further?

Whose Idea Is It?

Morgans and Wilsons

The subject:

Lithium prices

More info:

Spot lithium spodumene is now trading at US$850/t, Morgans noted last week, down a “staggering” -86% year on year, with lithium carbonate at US$14,500/t down -82% and lithium hydroxide at US$14,750/t down -82%.

The bottom line is the rush to jump on the battery bandwagon has far exceeded battery demand in the near term. Lithium supply has been significantly increased ahead of end-demand catching up. Lithium is not a rare element, and is not prohibitively expensive to mine.

Lithium is not new to boom & bust cycles. The metal went through a similar phase back in the noughties, driven simply by growing global awareness of climate change and its implications, and the need to transition to “green” energy, with electricity provided by lithium batteries an obvious winner in such a scenario.

Back then, demand expectations ran way ahead of demand reality. Tesla was founded in 2003, and launched its first EV in 2008. Less than 2,500 were produced, and cost over US$100,000.

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