October 3, 2016

Global Lithium Prices

   October 3, 2016

Global Lithium Prices

Global Lithium Prices.png

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Editor’s Remarks:
The recent boom in Lithium prices is due to the application of the metal in smartphones and autonomous car batteries. The Tesla model S requires 10,000 times more lithium than a smartphone. Given Tesla is estimated to increase production of its electric cars from 80,000 in 2016 to 500,000 next year, the market is clearly responding. Lithium is found in salt deposits in China, Australia, and South America, and has since represented large gains for those countries. However, as always, it is only a matter of time before a boom turns into a bust and these prices become unsustainable. As more lithium producers enter the market to capitalise on the lucrative returns, a downward pressure will be exerted on the prices and squeeze smaller players out of the business. This would be a disaster for any companies, such as Kingston Resources, who overpaid in their acquisition in order to enter the market. Whilst demand will no doubt rise, watch how the supply of lithium effects the industry. We should see a shock in the market and high volatility, but not for a few years.
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