Prices for lithium hydroxide, which is used in batteries with high nickel content is up nearly 150% this year, trading at $73,925 a tonne this week, according to the Benchmark Lithium Price Assessment.
Benchmark points out lithium prices have now trended upwards for 24 straight months as the EV market continues to expand with global sales of electric vehicles reaching one million for the first time in September, according to Rho Motion.
The higher prices in China’s spot market will feed through to longer-term contracts between automakers and lithium producers, says Daisy Jennings-Gray, an analyst at Benchmark:
“There’s still some catching up to do in long-term pricing contracts.
“How the spot market is behaving now might not necessarily be the prices being absorbed by much of the downstream but they will be soon for most consumers given the restructuring of pricing mechanisms we have seen in lithium supply contracts over the last year, putting further pressure on automakers and adding to cost difficulties in achieving their electrification targets.”
Click here to read Benchmark Mineral Intelligence take on a JP Morgan report that sent lithium mining company stocks skidding this week.