Lithium futures collapsed in 2023, amid a worldwide slowdown in EV sales, but have experienced a slight rebound throughout the first quarter of this year. A stabilization in prices could signal a return to new project announcements and investments. Just last week, the Department of Energy approved a nearly $2.3 billion loan to assist the construction of facilities at the US’s largest lithium deposit. The US is increasing federal funding for domestic lithium development to counter China’s increasing foothold in the lithium industries of South America and other regions. Key oil-producing nations like Saudi Arabia and the UAE are expected to begin extracting lithium supplies from oilfield brines to assist in the Middle East’s transition to new energy technologies.
Related ETF: Global X Lithium & Battery Tech ETF (LIT)
Though lithium futures tumbled by upwards of -80% throughout 2023, they’ve shown flickering signs of life recently, with prices for the ultra-light metal rebounding in most markets throughout the first quarter of 2024. US prices for lithium carbonate, gauged by Business Analyitiq have jumped nearly 10% in the year-to-date period. Spot prices on battery grade carbonate in China, have seen a steeper 20% gain over the same period.
Those gains have done little to offset the massive decline since lithium carbonate peaked in November 2022, but a potential bottoming out of the slump could help to spur a wave of renewed interest in mining and processing projects. Just last week, the White House announced the Department of Energy (DoE) would disburse a $2.26 billion loan to Lithium Americas for the continued construction of a refining plant at its Thacker Pass mine in Nevada. This site sits on the largest US deposit of lithium and could initially produce 40,000 metric tons of battery grade lithium annually; enough for as many as 800,000 EVs per year. In exchange for exclusive rights to lithium extracted from…
To read the complete Intelligence Briefing, current All-Access clients, SIGN IN All-Access clients receive the full-spectrum of MRP’s research, including daily investment insights and unlimited use of our online research archive. For a free trial of MRP’s All-Access membership, or to save 50% on your first year by signing up now, CLICK HERE
