China’s Electric Car Market Slump Drives Lithium Prices Down by 80%
Due to the sluggish demand for electric cars in China, lithium prices have fallen by 80% over the past year, prompting lithium producers to reduce their supply hurriedly.
On the 25th (local time), the British daily Financial Times (FT) reported, citing data group Benchmark Mineral Intelligence, that lithium prices had fallen to $13,200 per ton.
This is a fifth of the price, which exceeded $80,000 in 2021-2022.
The industry views that the price of lithium, an essential metal for secondary batteries, has fallen due to the decreasing sales trend of electric cars in China, the world’s largest electric car market.
China’s pure electric car sales in 2022 increased by 84% from the previous year to 5.4 million units, but the sales growth rate in 2023 was only 25%.
As lithium inventories increase, miners reduce production to guard against further price declines.
Pilbara Minerals, a crucial company in Australia’s lithium industry, announced that it could not pay dividends for the first half of this year as its fourth-quarter sales last year fell by 46% due to the drop in lithium prices.
Also, lithium producer Liontown Resources was planning to invest 760 million Australian dollars borrowed this week into the world’s largest lithium mine development project, the Kathleen Valley Project, but unexpectedly canceled it due to the drop in lithium price.