Market history · Commodities ·
Lithium prices fall by more than four-fifths
Lithium had been one of the most spectacular commodity booms of the early 2020s as electric-vehicle makers scrambled to secure supply. In 2023 the market turned. Shanghai Metals Market reported that lithium carbonate prices fell by more than 80% over the year, and listed lithium miners fell with them.
New supply had come on stream in Australia, China, South America and Africa in response to the high prices, while demand growth for electric vehicles and batteries, though strong, did not keep pace. Prices continued to fall into 2024, when SMM described a fall from 600,000 yuan a tonne to around 60,000.
The collapse was a lesson in how a rush of investment can turn a shortage into an oversupply.
The takeaway
High commodity prices attract new supply. A shortage can become a glut faster than the mines that cause it can be shut.
Sources
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