A few years ago we were reporting rising lithium costs, with the majority of scarce supplies among Asian nations. The dynamics behind this trends were easy to understand. The Laws of Supply and Demand said it all. Since then new players entered the market, creating a lithium-ion material surplus and a further fall in prices.
Some Battery Makers Prop Up Lithium-Ion Material Surplus
Reuters advises that some battery manufacturers have purchased lithium mines, or provided cash injections. This could be a good tactic, if it helps keep the lithium market stable. Compared to this, opening new mines could encounter a whole raft of environmental regulations.
Despite this trend, Reuters reported elsewhere that there have been a few lithium mine closures, and production curtailments too. But we should add that this is more than a strategic issue. A steady supply of affordable lithium metal is critical for battery storage, and electric car production.
Lithium-Hydroxide Prices Plummet Providing Relief for Some
The Laws of Supply and Demand have turned the lithium-ion material surplus in favor of consumers. After lithium-hydroxide prices soared, they fell by 90% since December 2022. This could be because Reuters reports a ‘glut of lithium’ likely to continue through to 2027.
However, this may not be good news for developers of alternative battery chemistries. Lithium batteries have several distinctive drawbacks, including environmental concerns and their inherent instability. Although for now at least, lithium metal is a strategic asset for the country mining it.
An Array of Alternatives Despite a Lithium Surplus
The BBC news channel was upbeat about a growing interest in alternative batteries earlier this year. They pointed out that lithium batteries are “very difficult to recycle, and require huge amounts of water and energy to produce”.
As we approach the end of 2024 we wonder, what will the global battery market look like by the end of 2025. Which battery chemistry will dominate, and more importantly, what will the state of global warming be?
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