Lithium Industry Buildup Is Outracing the Electric-Car Boom

Lithium ore falls from a chute onto a stockpile in Widgiemooltha, Australia. Photographer: Carla Gottgens/Bloomberg

The accumulation of the lithium industry is surpassing the rise of electric cars. Likewise, metal production increases as growth slow for electric vehicles in China.

Certainly, lithium miners are accumulating for a booming future when electric cars generalize. But speed bumps are glimpsed, given prices falling in a new production explosion and demand growth declining in China.

And it is well known that between mid-2015 and mid-2018, lithium prices, the soft white and silver metal crucial for rechargeable batteries, almost tripled when the global fleet of electric vehicles reached the 5 million mark, and the automotive industry began to worry about the supply of raw materials.

In this way, this led to the opening of six lithium mines in Australia since 2017 as companies ran to make profits from evolving technology. But while the rise of electric vehicles is approaching, it is not here yet.

More and more concerns arise

It is clear that sales growth is slowing in China, the main market, and the momentum to fill the battery supply chain has cooled. Consequently, it has led to a 30% drop in the price of lithium that is causing concern about where the fund may be.

In this way, it is appropriate to mention that on Monday, the shares fell greatly for lithium producers worldwide. And it is that Albemarle Corp., fell 1% at 10:06 am in the New York trade, while Livent Corp., fell 0.9%. US deposit receipts from Soc. Química y Minera de Chile SA fell 0.8%, while in Australia, Pilbara Minerals Ltd. fell 2.1% and Galaxy Resources Ltd. fell 1.8%.

It should be noted that during the first quarter of 2019, sales of electric vehicles in China, the largest market for electric vehicles, grew by approximately 90% compared to the previous year.

Meanwhile, lithium production in Australia is expected to increase by approximately 23% over the next two years. And last month, Chile’s mining minister for number 2, Baldo Prokurica, said the current administration seeks to double that country’s production in four years.

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Source: Laura Millan Lombrana | Bloomberg