The price of %Lithium has plunged 11% in the past 24 hours to $13,200 U.S. per tonne, its lowest level since the onset of the Covid-19 pandemic in 2020.
Lithium’s price has now fallen 80% over the last year as an excess of supply swamps the global market, according to data from Benchmark Mineral Intelligence.
Analysts are blaming the ongoing drop in lithium prices on slowing demand for electric vehicles, particularly in China, which is the world’s biggest car market.
Consumers are deferring switching to electric vehicles due to the cost and lack of infrastructure, such as public charging stations, to support them.
Due to the continued crash in lithium prices, miners around the globe are now scaling back their production of the metal used in electric vehicle batteries and moving to cut costs.
The pullback among lithium miners is particularly acute in Australia, which produces 40% of the world’s supply.
In a recent research note, U.S. investment bank %GoldmanSachs (NYSE: GS) forecast a surplus of 200,000 tonnes of lithium, equal to 17% of global demand, this year.
Goldman Sachs’ analysts said that “substantial supply cuts” are needed to balance the market and for lithium prices to recover from their current trough.
%Albemarle (NYSE: ALB), one of the world’s largest lithium producers, has forecast 2024 capital expenditures of $1.60 billion U.S., down from $2.10 billion U.S. in 2023, and said that it is moving to conserve cash.
However, despite the ongoing decline in lithium’s price, it has not yet fallen as low as it did in 2020 when the price dropped to $6,000 U.S. per tonne before recovering.
