- Recession-like conditions in the nickel-cobalt-manganese battery sector

- Occasional

- Market prices of lithium used in electric vehicle batteries point to a global decline

Lithium has been found to be abundant in the soil of Jammu and Kashmir in India. There have been indications from government sources that the auction of lithium from this quantity will be started soon. Lithium is used as an important raw material in the production of batteries for electric vehicles. The first amount of lithium was found in the soil of Jammu and Kashmir in February this year, which was estimated to be around 59 to 60 lakh tonnes. Offshore miners also had an eye on when an auction of some of this volume was launched. It was also reported that some joint venture agencies of the Government of India were trying to acquire lithium deposits on Argentinian soil.

The flows of lithium metals in the global Market and domestically have seen a sharp reversal recently. Lithium is an important element in the production of batteries. This is an important component for electric vehicles. According to recent indications from the Chinese market, lithium prices are under pressure there. There is a drop in spot demand.

The fall in the forward price of lithium futures had an impact on the spot market. Demand for lithium salt and lithium carbonate in China has recently been lower than expected. Cathode manufacturers remained out of the market. However, according to Chinese market insiders, there is a possibility of a renewed demand from the cathode manufacturers at any time, given that the on-hand stock of lithium with the cathode manufacturers has reduced.

Meanwhile, the market price of lithium hydraulics has come under particular pressure compared to lithium carbonate in China. Such a situation has been observed in the wake of recession-like conditions in the nickel cobalt manganese battery sector. However, market conditions have been relatively strong in the lithium iron phosphate battery sector.

The market price of lithium hydroxide (battery-grade) in China recently dropped to around 165,000 yuan (Chinese currency) a tonne and traders were offering goods at these prices. In terms of dollars, this price was estimated at around 22,500 to 22,600 dollars per ton. However, this price was quoted as 1 lakh 80 thousand yuan (Chinese currency) per ton by Chinese lithium producers. According to these producers, given the fact that production costs have remained high, the market prices are now unlikely to fall further. Behind China, East Asia's lithium markets were also down. Consumers in South Korea who had previously carried the goods went on to resell the goods. Lithium markets in Europe and America were also soft. However, now the informants are showing hope of re-stocking demand in the last quarter of the year.

It has been heard that efforts are being made to obtain such a quantity in Chile. In addition to Argentina and Chile, the amount of lithium in the soil has been reported in abundance in Australia. Meanwhile, experts predict that the size of the electric vehicle market will also increase in the coming years.

In 2022, the size of the global market of lithium was around 12,891 to 12,892 million dollars, the size of which will further increase and reach around 20,889 to 20,890 million dollars by 2031, global forecasts show. Every year the market size of lithium is increasing at the rate of 8 to 9 percent annually.

Meanwhile, according to Fitch, global demand for lithium is likely to exceed supply from 2025. China's demand is likely to increase in 2025. In the period from 2023 to 2032, such demand in China is showing the possibility of increasing at the rate of 20 to 21 percent annually. In 2021, the global production of lithium was reported to be 5 lakh 40 thousand tons. By 2030, the annual global demand is estimated to increase to 3 million tons. From January 2021 to November 2022, there was a significant rise in the price of lithium carbonate.