He lithium It has become in recent years a real gold bank. Its price has not stopped increasing, with a strong rebound in 2022. But something surprising has happened recently. The price of the metal fell sharply and rapidlywhich is helping to make electric cars somewhat more affordable in production.
According to the Benchmark Minerals price reporting agency, since January, the price of lithium has fallen almost 20%. An abrupt drop that has occurred in full growth in sales of electric cars.
For his part he cobalt, another key material in many batteries, has been reduced by more than half. He copper, essential for electric motors and batteries, has reduced its price by 18%. And all this at a time when the demand does not stop increasing and where forced marches are trying to put new mines into operation in places like the United States or Peru.
These sudden changes in prices have even confused many analysts who had anticipated that prices would stay highor even rise this year, which would slow down the energy transition in transport but also in renewable energy.
Instead, the fall in the prices of raw materials has made it easier for car manufacturers to reduce the prices of their electric vehicles, or have increased profit margins.
One of the first movements came at the beginning of January, when Tesla reduced the prices of the Model 3 and the Model Y, to later do the same with the Model S and the Model X. Some discounts that in some cases have exceeded 10%, igniting the fuse of a price war that, as we can see, also has another key part in the reduction of the costs of the components.
For the experts, the prices of components such as lithium could continue to fall due to factors such as less strong-than-expected demand in Europe and Chinawhere the changes in the aid programs have slowed down sales somewhat at the beginning of the year.
But other industry voices said the drop could be due to new mines and processing plants coming on line, which had increased supply and lowered prices.
The point is that even after falling in price so sharply, lithium prices remain so high that mining and processing the metal is a hugely profitable business. Metal suitable for batteries costs between $5,000 to $8,000 per ton to produce. Its sale is made for 10 times that amount. A money printing machine according to Elon Musk himself.
Given those huge profit margins, investors are eager to put their money into mining and processing projects. Even governments are giving large sums of funds to new lithium-related projects, which on paper should result in an increase in production, and a drop in prices.
But other experts warn that the opposite situation could occur. According to US administration estimates, lithium supply must be multiplied by 42 by 2050 to meet the demand of sectors such as electric cars and stationary backup.
The problem according to José W. Fernández, undersecretary for economic growth, energy and environment of the Department of State, It is in the processing part of this lithium. And it is that the metal is abundant and they do not stop discovering large deposits all over the world. But the processing of this is much more limited, and is mainly in the hands of China.
The Most of the lithium refineries are in the Asian giant, and few companies outside the country know how to build lithium processing plants. Beijing’s near-monopoly over an essential resource alarmed the Biden administration, which has allocated tens of billions of dollars to incentivize Western companies to develop lithium mines and refineries in the United States or in countries with which it shares straits. political and economic ties, such as Canada or Mexico.
And then came the sodium
One of the alternatives that are gaining the most strength are sodium batteries. Some accumulators that in a few months have gone from irrelevance to the front page of today, and who want to become an even more economical and sustainable option.
We have seen an example of the impact that sodium can have with cobalt. And it is that this controversial material, as we have said before, it is also collapsing in its prices. This is mainly due to the explosion in demand for lithium iron phosphate (LFP) batteries that have not stopped seeing their sales quota increase, which allows them to gradually displace those endowed with cobalt, affecting their demand and price.
Now it remains to be seen where the bottom of the lithium price will be, which as we remember in 2020 bottomed out with a price of just 5,600 dollars per ton, currently standing at 44,700 dollars per ton, already far from its all-time highs of 2022. when it reached $88,600 per ton.