Lithium prices in China have slumped by almost a third in the past three months after weaker demand in the world’s largest market for electric vehicles has punctured a two-year rally for the key battery component, reports the Financial Times. Prices have dropped 29% from November highs to RMB 425,000 ($61,795) per tonne, according to pricing agency Fastmarkets, driven by concerns over the strength of EV demand in Asia’s largest economy.
“There has been persistent weakness in China,” said Jordan Roberts, lithium analyst at Fastmarkets. “The market is waiting to see the impact from the reduced new energy vehicle subsidies and is concerned by low household confidence, which is tied to the country’s property crisis.”
Lithium prices rocketed from mid-2021 as breakneck growth in EV sales prompted a scramble among automakers and battery manufacturers for the metal nicknamed “white gold” for its importance to the clean energy industry. But waning Chinese demand has raised doubts over how tight the lithium market will be this year, dragging down prices elsewhere in the world as well as shares of lithium producers.