What’s new: The lithium price surge hit the brakes Tuesday for the first time in eight months, reflecting weakening demand from automakers amid extended pandemic lockdowns and seasonal factors.
The price of battery-grade lithium carbonate dropped 4,000 yuan ($628) to 496,000 yuan per ton Tuesday, pausing eight months of gains since July. It was the first time since March 4 that the material’s price fell below 500,000 yuan per ton.
The context: The price of lithium has surged nearly 500% over the past year as demand for electric vehicles accelerated worldwide.
Industry sources said the price drop mainly reflects disruptions at major electric vehicle factories as China locks down cities to fight its worst Covid-19 outbreaks in more than two years.
Leading electric-car makers including Tesla Inc. and Nio Inc. have suspended production in Shanghai due to lockdowns. Virus restrictions in other cities also affected auto parts suppliers and disrupted production at major automakers.
The end of the procurement season and rising supplies are also working to stabilize lithium, analysts said.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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