What price IS lithium27 Nov 2018 19:10
As demand heats up for lithium, a group of companies are hastening efforts to shine a light into the long-opaque market for the battery material that metal-industry cheerleaders call the “new oil.”
The effort is seen bringing more efficiency to the market for lithium, a key ingredient in the rechargeable batteries that power electric vehicles and gadgets such as smartphones and laptops. But any such market also faces challenges, experts say, because of the complex nature of the metal in its refined state.
Auto makers, battery companies, and smartphone and laptop providers have been racing to lock down supplies of lithium from major producers such as Charlotte, N.C., based Albemarle Corp. ALB -1.44% , the world’s biggest miner of lithium by volume, and Chilean company Sociedad Quimica y Minera de Chile SA, SQM -0.94% the No. 2 producer. Some of the world’s notable lithium users include Apple Inc., Samsung Electronics Co. and Tesla Inc.
The surge in demand has sparked efforts to bring transparency to prices for lithium. Several commodity-price tracking companies, such as Benchmark Mineral Intelligence and Fastmarkets, formerly known as Metal Bulletin, have been expanding efforts to track prices for the ultralight metal. S&P Global Platts started publishing lithium prices earlier this year.
Because lithium isn’t traded on any exchange—unlike gold or silver, for instance—buyers have long been at a disadvantage in negotiations with producers, according to market watchers. In opaque markets, producers often have greater access to information about fast-moving market dynamics, such as unintended mine outages or suddenly sagging demand.
That is especially the case with lithium, a metal mined by a relatively small group of big suppliers in countries from Chile to Australia.
Charging Up
Lithium prices are up nearly 100% since early2016 amid expectations that demand couldoutstrip supply over the next decade.
Benchmark Lithium Index
Source: Benchmark Mineral Intelligence
2016
’17
’18
100
150
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April 2016x171.06
Big lithium miners “may say they support transparency, but they really don’t,” said Chris Berry, founder of New York commodity consultant House Mountain Partners. “Keeping prices secret between themselves and their end users is good for them.”
An Albemarle spokeswoman declined to comment. A spokeswoman for SQM said the notion that the company is against price transparency for lithium “is not correct.”
Despite a dip in lithium this year, prices are up nearly 100% from early 2016 through October, according to London commodity tracker Benchmark Mineral Intelligence, amid expectations that demand could outstrip supply as production of electric vehicles, the biggest source of demand, takes off in the next decade.
Commodity researcher Wood Mackenzie expects global production of lithium to top 700,000 metric tons by 2025, more than double projections for 2018. Demand from rechargeable lithium-ion batteries
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