Lithium is a white metal mainly used to make batteries for electric vehicles. In 2022 spot prices for lithium carbonate, the most traded form, surpassed $80,000 a tonne, setting records. Excitable analysts attributed the surge to an unstoppable campaign to replace the world's petrol cars with EVs, but the rally was in fact a one-off triggered by old-fashioned carmakers rushing into the thin spot market as they began building EVs, according to Tom Price of Panmure Liberum, a bank. Even though most lithium is sold under multi-year contracts, they and their battery suppliers exaggerated price moves by piling into the spot market.
By mid-2025 a global glut had kept spot prices near $10,000 a tonne, 90% below their peaks. China's government forced Jianxiawo, a big lithium mine, to close after its permit expired, briefly lifting prices, but the global market remained in surplus according to Benchmark Minerals, a data firm. Little evidence emerged that China aimed to curb production broadly.
I didn't like the play, but I saw it under adverse conditions. The curtain was up.