Price collapse, supply shocks and cracks in the lepidolite supply chain
Weak raw materials prices, strong EV battery demand
In the inaugural edition of the ‘EV Battery Lithium Monthly’ published this month, we analyzed the implications of the recent lithium price collapse, identified the likely sources of resultant supply shocks in 2024 and highlighted those bold enough to push through with expansion plans despite epic headwinds.
In a matter of weeks since authoring these insights, we are seeing the anticipated cracks emerge in China’s lepidolite supply chain (CATL et. al.), moderated production guidance from Western Australian producers (Wodgina, Mt. Cattlin) and delays across development projects (Grota do Cirilo, Fenix, Sal de Vida). However, advanced greenfield construction projects (Goulamina, Mt. Holland, Kathleen Valley) and brownfield expansion projects (Greenbushes, Pilgangoora) remain largely on-track.
Despite the market’s malaise, Adamas data shows that December 2023 saw 20.5% more LCE deployed onto roads globally in newly sold passenger EV batteries than the year prior. Preliminary January 2024 numbers are looking even better. As excess inventories continue to percolate through the value chain, Adamas expects a swift recovery in lithium salt demand from traders and cathode producers. The question outstanding – will it be a V-shaped or U-shaped recovery?
Irrespective, it is clear that weak battery raw materials prices on the backdrop of robust EV demand growth presents a fascinating intersection of risks and opportunities for EV supply chain participants.
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The ‘EV Battery Lithium Monthly’ is a subscription-based monthly report and data service for tracking end-to-end developments across the global EV, battery and lithium supply chain.
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