Who Will Benefit From Low Lithium Prices?
Cutting of the lithium metal ingot 
Oleg BurunovThe lithium market is experiencing a period of rapid growth, but this may soon change significantly, Thomas W. Pauken II, geopolitical commentator and consultant on Asia-Pacific affairs, told Sputnik. In 2024, average prices for battery grade lithium carbonate in China – the world’s top consumer and largest producer of the metal – are expected to fall by more than 30% from current levels. Since November 2022, these prices have fallen from $84,500 per metric ton to $18,630 per metric ton, a decline of 77%.The developments come as General Motors, Honda, LG Energy Solution and other automakers and battery manufacturers put plans to expand electric vehicle (EV) production on hold as rising interest rates hamper demand.
WorldElectric Vehicle Makers Find Respite in Falling Lithium Costs29 November, 17:53 GMT
"In reality, actually, lower lithium prices would make it cheaper for the manufacturers, who are the buyers of lithium. So this is actually an advantage for the buyer rather than the seller," Thomas W. Pauken II, geopolitical commentator and consultant on Asia-Pacific affairs, shared with Sputnik.
He stated that the buyers “would be the EV battery-makers, so this comes to an advantage, especially of the Chinese EV battery makers.”
"Most of all because they continue to really do a big push into EVs. But there's also talk that perhaps Biden will do some trade protection measures on China's EV batteries. If that happens, that will also cause lithium prices to go lower because the Chinese companies, who are connected to EVs cannot do any type of business in the US," Pauken II added.
According to him, “if lithium prices go down [further], this would obviously be a big win for China.”Commenting on Elon Musk’s recent claims that lithium refining is a “license to print money,” the analyst noted that being a billionaire ”doesn’t make you an investment genius.”
"So this statement by Elon Musk should not be taken as guarantees that the lithium market is booming. Everything in the markets go up and down. It is how markets work. If they don't go up and down, then we would have terrible inflation in our world and everything would get too expensive. We need up and down markets to create more balance between supply and demand," Pauken II stressed.
AnalysisLack of Mining Capacity Threatens to Upend Global Lithium Race, Analyst Says16 March, 21:07 GMTHe also touched on a possible scenario in which former US President Donald Trump is re-elected next year, which is sure to lead to lower lithium prices.”I think what’s going on, is that the traders are making judgment calls based on future actions. Peak prices hit last year, and now they’re just going down,” the analyst concluded.
