21 ms·

Why are lithium prices collapsing?

232 points by xbmcuser 4y ago

xbmcuser 4y ago
The more I read about prices of different commodities the more I realise the biggest movement in prices is not because of demand and supply but rather because of speculation and gambling. And how most of the news is manipulated. For example they are equating lithium price fall with stagnating car sales. Where as car sales might be stagnating but electric car sales are taking a larger portion of total car sales ie electric car sales/lithium use is still increasing.
- chii 4y ago
  > the biggest movement in prices is not because of demand and supply but rather because of speculation and gambling the movement reflects the expected future supply and demand at the time. The speculation is something that financial engineers use to offload the risks of such commodities from one party to another (such as from producers to consumers of said commodities).
  - xbmcuser 4y ago
    With the way derivatives are used these days to speculate/gamble they do not help rather result in the boom bust cycles we see in more and more industries these days.
    - sigstoat 4y ago
      and when exactly do you think that changed? if “these days” are in some sense bad, when were the good ones?
- bullen 4y ago
  Markets in a high energy cost environement make their margin more on volatility and speculation. You will also see margins themselves widen until the system falls in on itself. We dont have a financial margin tracker. Also increasing interest rates in a highly indebted economy increases inflation; short term by widening of margins and long term by offputting energy extraction. Lithium will explode soonish. Margins amplify volatility.
- 226_ebro_treaty 4y ago
  Wait until you learn about OPEC and oil prices :-)
  - KingOfCoders 4y ago
    Because they will change their mind? "demand and supply" OPEC is a cartel constraining supply to increase prices, it's not a free market but an example of "demand and supply" in it's most brutal form. OPEC prices are not about "gambling".
    - jimbob45 4y ago
      OPEC has gambled several times in the last decade on future oil prices (and not always won).
      - KingOfCoders 4y ago
        In which way has OPEC gambled on future oil prices that moved prices? To my limited understanding this would involve buying oil futures.
        deleted 4y ago
        [deleted]
        jpgvm 4y ago
        You don't need to use derivatives to gamble, they control the supply but that control is a lagging control. Any decision they make is essentially a bet about where the oil market is going to move in several months. They are usually big enough that any move they make is going to set the tone but that isn't always the case. They need to make continual bets on the health of transports, changes in energy mix etc in order to move or keep the price in a favorable band for them. Misstep and the price of oil falls, cutting into their profits or push it too high and face demand destruction and shale extraction coming online because it's profitable at those higher prices, increasing competition and stifling volumes simultaneously.
  - 4y ago
- mmiliauskas 4y ago
  I personally have an impression, that commodity prices are a function of shocks. Gas prices in Europe, uranium prices in mid 2000s, lithium due to sudden EV demand, etc. World then adjusts, and prices "collapse" or rather stabilize. Basically, don't buy commodities when the price is high.
  - taneq 4y ago
    That always bugs me when these things are reported. Something goes up 30% in a year due to speculation and/or supply chain shocks, and then drops by 5% and it's "prices crash!" No it's still up ~25% year on year.
    - mmiliauskas 4y ago
      If media made well adjusted statements, it wouldn't be the media then wouldn't it :D
    - lotsofpulp 4y ago
      Which is why one should stick to obtaining their data from the source and ignore clickbait articles.
    - ipaddr 4y ago
      You are looking at different horizons. It might be up year over year but month over month if it trends down that information is more accurate as to where the future price will grow.
    - j16sdiz 4y ago
      For lithium, it was ~300% up in a year and back to original price in a few months.
    - deleted 4y ago
      [deleted]
- bawolff 4y ago
  Speculation & gambaling is just second order supply & demand.
  - yunohn 4y ago
    If you have massive buy/sell orders between finance bro speculators - how does that equate to real supply/demand for the underlying commodity?
    - jpgvm 4y ago
      There is a finite supply of the underlying, each sold future equates to agreed upon future deliveries. So in reality the number of contracts sold (not traded) does equate 1:1 with demand for the underlying. When that doesn't hold true you will end up with Failure To Deliver (FTD) which causes Very Bad Things™. Generally speaking though commodities markets aren't rigged in the way that people complain about in some other markets but they are subject to pretty violent volatility in the face of uncertainty. This is largely due to pretty fixed supply with highly variable demand. i.e I can't just shut off all the oil wells right now and return ships currently on-route to energy exchanges and even if I could I wouldn't have the storage. Storage is also an interesting one because storage costs money and was pretty much why oil contracts went negative for a short period.
      - RandomLensman 4y ago
        Most future positions are closed out or rolled before delivery - so open interest can easily exceed demand for the underlying.
      - yunohn 4y ago
        All of what you say could be true - I just find it hard to believe given IRL finance bros are constantly trading and profiting off of futures/commodities trading without a single worry of the underlying commodity.
        hhmc 4y ago
- nprateem 4y ago
  > speculation and gambling Of course. The net present value of a stock or asset can only be calculated based on its expected future price and earnings. Since there's no way to know this with 100% certainty, stock prices are inherently speculative. Even value investors must struggle to accurately value a company's intangible assets.
  - danaris 4y ago
    But there's a material difference between "attempting, in good faith, to determine what the demand for a commodity will be in the future, and buying based on that" and "attempting to determine what the price of a commodity on the futures market will be and buying based on that". When people say that a commodity's price is being driven by speculation and gambling, they mean that it has shifted from the former to the latter. This means that the price is disconnected from the actual, physical use of the commodity, and is instead being driven by the inconstant passions of the commodities market itself.
    - lotsofpulp 4y ago
      >But there's a material difference between "attempting, in good faith, to determine what the demand for a commodity will be in the future, and buying based on that" and "attempting to determine what the price of a commodity on the futures market will be and buying based on that". These are indistinguishable. Unless you want to restrict markets to being only between suppliers and consumers, there will always be middlemen attempting to predict the price, and since they need to eat, they will be attempting to profit from changes in price. Which is fine because suppliers and consumers are many times willing to let others handle the risks of price changes (volatility), hence the market for futures.
      - GolfPopper 4y ago
        Of course there's a difference. It's based on information asymmetry, i.e. the 'greater fool' theory. When the information asymmetry is deliberately created, that's being done in bad faith, and is the sort of thing we call fraud when done on an individual level. It often feels like a great deal of our corporate and financial machinery are designed around diffusing actions that would be criminal, or reprehensible if done person to person, in order to allow them to be done at scale without consequence.
- bboygravity 4y ago
  It's interesting to see that people still believe there is some type of fair price discovery when things like dark pools, market maker exemptions, naked shorting, tokenized securities, trillions in derrivative bets (hello 2008), spoofing (JP Morgan getting fined 1 billion after making 10 billion in profit in gold price spoofing) and so on and so forth exist. Speculation and gambling about what future prices will be are not the big issues here, the markets themselves are completely broken (by design).
  - RandomLensman 4y ago
    What is the issue with a dark pool, for example? They are generally not designed for price discovery anyway.
    - quote 4y ago
      But wouldn’t it be better if the volume at least is shown on open exchanges?
      - JumpCrisscross 4y ago
        > wouldn’t it be better if the volume at least is shown on open exchanges? Empirically, no. Large blocks of stock don’t have a liquid market. Forcing them into the open means chopping it into tiny pieces while using derivatives to hedge, for the sophisticated, and getting hosed, for the unsophisticated.
  - Rufbdbskrufb473 4y ago
    You just listed a bunch scary sounding financial buzz words, but I doubt that a thorough analysis of them would support your conclusion. In fact, many have the opposite effect and result in more efficient price discovery. Take naked shorting for example. Without shorting, it would be far more difficult for an equity research firm to be incentivized to look into fraudulent stocks, as was widespread with Chinese companies a few years ago. Without their efforts, stock prices would have remained inflated for longer.
- z3t4 4y ago
  Monopoly and cartels has the most impact on prices. and the market can not work if there are few partisipants. also gatekeepers, those that stand in between producers and consumers can screw up the market if they have a large potion of the market.
- blablabla123 4y ago
  Speculating/gambling is a huge factor in anything that can be traded. But commodities also rely on physical deliveries which have influenced prices directly on various occasions. Of course for commodities also the selling side has direct influence on prices. That can go so far that for oil deliveries the tab is opened/closed on convenient times. So understanding prices is significantly more difficult than e.g. for stocks. Also speaking about the news part, a lot of data on commodities isn't freely available so you need to buy it. Trading itself on those is highly restricted - and speculative - anyway. > Where as car sales might be stagnating but electric car sales are taking a larger portion of total car sales ie electric car sales/lithium use is still increasing. I'm quite surprised the article doesn't mention sodium batteries. Li-Ion batteries are notorious for thermal runaways, so CATL and Tesla already shifted to LiFePO batteries quite some time ago. I think everybody would be more than happy to ditch Lithium based batteries altogether.
- nurettin 4y ago
  Price increase is governed by how much a buyer is willing to pay and how long a seller is willing to hold. That is supply and demand. Their reason to supply or demand is 100% due to speculation or gambling or whatever you want to call it. There is no intrinsic value for anything. Supply and demand is not a magic spell that saves people from guessing what prices should be.
- puppymaster 4y ago
  car manufacturers seeing the same sales data would then secure lithium supply 12 months ahead for an expected 12x growth, which then turns out to be only 5x. From macro data pov, the graph is still trending up. This is why guidance is important and also why lithium miners hedge against their inventory using future market. Supply and demand still applies, just that its effect is being amplified by overleveraged commodities trading market.
- broast 4y ago
  You're definitely right that the news loves to write headlines after any daily price fluctuations and pretend they know the reason, when in reality it usually explains nothing and becomes irrelevant by tomorrow.
- JumpCrisscross 4y ago
  > how most of the news is manipulated. For example they are equating lithium price fall with stagnating car sales Mass media is mostly crap at price-move stories. It’s less manipulation than false correlation. (The writers are incentivised to write, not to write a particular story.) There is a lot of thought that goes into lithium pricing. Current price moves are mostly speculation about supply, given near-term demand can be pretty precisely measured given battery production in operation and breaking ground. (Battery supply limits EV production, which itself outstrips demand, so volatility in consumer demand is tamped at the extraction layer.) Recent debate is about potential supply from brine in China.
- tourgen 4y ago
  [dead]
- marcosdumay 4y ago
  > is not because of demand and supply but rather because of speculation and gambling That's what a zero interest rate policy buys you.
- rsecora 4y ago
  Batteries has a long supply chain, and in this case the market is forecasting a drop in demand. Due to more sources and increase output in the early stages of the chain, the offer has increased. Note also the article refer explicit to EV in different paragraphs . it's described in the article. > with the expiry of a more than decade-long programme of subsidies for EV purchases. > the expanding supply outlook for the metal is mainly what is pushing prices lower this year > Supply is coming on stream faster than you can say ‘boo’. > first-ever lithium deposit to be discovered in Iran’s mountainous western province of Hamedan. At an estimated 8.5 million tonnes, > China is also expanding its lithium-supply capacity from lepidolite, which, while considered the most abundant lithium-bearing mineral,
- seizethecheese 4y ago
  Your two premises don’t necessarily relate to each other. I believe both: - journalists attribute price changes to whatever story they can find. Sort of like how every day there’s a story of why the Dow moved by a fraction of a percent. - price moves are almost entirely supply and demand. Sure, speculation can change price in the near term, but considering the size of these commodity markets, you’d have to believe an absolutely enormous amount of capital is at play in speculation.
- metalspot 4y ago
  there are two factors that control market prices: supply elasticity and demand elasticity. commodities with inelastic supply and inelastic demand are prone to very wide price swings. inelastic supply means that increasing prices don't increase supply. in the case of lithium, it take time to bring new production capacity online, so supply is very inelastic in the short term. inelastic demand means that increasing prices do not decrease demand. in the case of lithium, batteries are a very valuable product, and the raw cost of lithium is a small percentage of their total value, so increasing prices for lithium do very little to reduce demand. the price movement here is totally predictable and exactly what you would expect based on standard economic formulas taking into account supply/demand elasticity. it is not speculation or gambling. demand went up, supply lagged, the price spiked, supply increased, the price went back down. electric car sales may still be growing but growing at a lower rate, and projected demand growth is probably decreasing relative to projected supply, so the price is falling.
- opportune 4y ago
  How so? The people physically purchasing commodities are doing so by determining how worth it is to them at the current (or future) price, same with sellers. Speculators are almost never actually taking delivery, but they are providing liquidity for buyers and sellers by participating in transactions as counterparties. The final price paid by the ultimate physical buyers is based on their own value judgment of quantity demanded per price, and the final price paid to physical sellers is based on that same price (of course, either could be willingly using futures instead of spot prices to reduce risk). Buyers and sellers could trade directly among themselves if they wished, and if the commodity markets were divorced from reality (either unable to deliver on futures contracts or having futures settled at different prices than their contracts stipulate) nobody would use them. Because speculators don’t take delivery, how they react to news and other events is only assisting in price discovery between the time a future is issued and settled, because at settlement time there is no immediate uncertainty regarding supply and demand in the spot market. I think you might be making a common mistake in your comment of equating news for popular consumption with actual news that traders, buyers, and sellers care about (usually very quantitative and well guarded data with nuances that an article for public consumption will never account for). Articles for popular consumption are not moving markets very much, especially in commodities where public involvement is low (vs stocks) and consequently public sentiment has little effect.
Animats 4y ago
Much better article in the Economist this week.[1] [1] https://www.economist.com/business/2023/04/20/why-crashing-lithium-prices-will-not-make-electric-cars-cheaper https://www.economist.com/business/2023/04/20/why-crashing-l...
- defrost 4y ago
  aka: https://archive.is/k5Hjd https://archive.is/k5Hjd Not a great article (from a minerals and resources perspective). Two specific factors; recent mine expansion at sites that dig in the dirt and produce concentrates _and_ recent and near future expansion of processing locations that take concentrates and refine to ship usable lithium. Eg: Minesite in Western Australia currently ships concentrates to Malaysia and will soon ship also Texas.
  - Animats 4y ago
    Shipping concentrates is pretty standard in mining low-grade resources. Near the mine, there's usually some kind of plant to extract the good stuff and discard the dirt. Otherwise, there's a huge amount of wasted effort shipping dirt and rocks around, and dumping them someplace. What's shipped out usually needs more processing. What's left behind is usually the big environmental headache with mining.
    - defrost 4y ago
      Lithium traditionally has seen refinment of concentrates take place some distance from the primary hole in the ground; Western Australia is soon opening refinement facilities "not far" (couple of hundred km) from the primary mine (Greenbushes). Generally digging hole -> concentrate (in this case (Lithium) the concentrate is Spodumene) is a largely mechanical process - crushing, grinding, screening, centrifuge, seperation, etc and what's left behind is overburden and not of interest tailings - this is "regular mining problems" and these are not huge in todays regulated environment, post mining rehab is required and ideally pre mine eco systems come back. Refinement of concentrates, particulalry of Rare Earths is generally where nasty chemicals come into play which requires tight processing and strong oversight to keep "clean" .. acids at end of re-re-re-use need to be nuetralised and processing areas need strong under-pan barriers to prevent spills leaching down to groundwater, tailings dams need to be strong, monitored, and regularly dealt with. These are all things which are "all right" in theory and good practice .. but do require strong oversight and an educated third party invested public keep a close eye on transparent operations. Bad things can happen otherwise.
Yeahsureok 4y ago
No mention of CATL releasing sodium based batteries this year? Just their dropping of lithium battery prices?
- _0w8t 4y ago
  Sodium batteries will have any effect only in a few years. So this is mostly the case of increased production in anticipation of stronger demand that has not realized. The latter is not necessary an indication of a less demand for batteries. There were a lot of progress recently in increase of the energy density in mass-produced batteries, and that may contributed to lessening of the demand.
atoav 4y ago
Wasn't some country planing to nationalize their lithium stock?
- nprateem 4y ago
  Chile https://www.ft.com/content/ebd48bbc-1390-4679-99fe-682975bbdba8 https://www.ft.com/content/ebd48bbc-1390-4679-99fe-682975bbd...
  - bohadi 4y ago
    Here's some wild speculation grounded on a wisp of research: Eurasia based cartel had cornered the market on lithium vital for new energy. US based interests bent the ear of the Chilean government to break this monopoly by nationalizing these privately owned mines and rediverting the supply. Speculators got wrecked. Does anyone know if a Credit Suisse customer had dealings in Chile?
    - longemen3000 4y ago
      tianqi sold all his shares of SQM (one of Chile lithium companies, around 23%) after the announcement. The situation of the lithium in Chile is very particular. in the Pinochet dictatorship, litium was nationalized, because it was a key ingredient of atomic bombs (and not much else at that time), and USA didn't want other countries to access the resource, so all current mines are in a lease contract (Albemarle until 2043, SQM until 2030). the new proposition opens new zones for exploitation, in exchange of the public-private parnership
_0w8t 4y ago
As Nassim Taleb observed, “Scarity is always followed by glut”.
- tuatoru 4y ago
  That was a rephrase of the old saw, "the cure for high prices is high prices".
  - euroderf 4y ago
    new saw, for this guy
    - tuatoru 4y ago
      Congratulations on being one of today's lucky 10000! [1] 1. https://xkcd.com/1053/ https://xkcd.com/1053/
iamacyborg 4y ago
Nice bit of serendipity there, I’m currently reading a book called Volt Rush that talks about the battery supply chain. Nice to contextualise some of what that’s been talking about with recent events.
noisy_boy 4y ago
Maybe with recycling options coming up[0], availability would be less of an issue and the market is responding accordingly? [0]: https://news.ycombinator.com/item?id=24316056 https://news.ycombinator.com/item?id=24316056
lmpdev 4y ago
Does anyone have any insight into when we're going to see some movements in lithium battery prices per cell? I've seen them stuck at $1-3/cell for what feels like two years
- jpgvm 4y ago
  Probably not until significantly more capacity is added. Right now all the big battery suppliers (CATL, CALB, EVE, LG Chem, Panasonic) are all at capacity meaning they have no incentive to lower prices. If new capacity comes online and it's not greeted by increased demand (unlikely) then prices could fall. Wouldn't hold my breath though, the targets China has for EVs is going to provide strong support for demand even if the rest of the world goes into recession.
  - tuatoru 4y ago
    In 2022-23 several hundred billion USD of investment in new battery production capacity in the USA and Europe was announced in multiple announcements. (Source: cleantechnica, or batteriesnews, or energy-storage.news, or maybe industry weekly; I'll try to find it again. In the mean time, there's this[1]. Edit: and this: battery-news.de[2].) Much of that should come online in 2025 - 28, if not canceled first. Edit 2: there are several steps in the production chain beyond mining and initial refining. There is material production for anodes, cathodes, electrolytes, separators, and lithium; there is cell assembly, there is pack assembly, and there is production of electronics associated with cells and packs (charge controllers, pack management). Each of these has its own issues. It's not as "simple" as refining oil. 1. Chart 1: Lithium-Ion Battery Capacity Expected to Surge, FRB Dallas: https://www.dallasfed.org/research/economics/2022/1011 https://www.dallasfed.org/research/economics/2022/1011 2. https://battery-news.de/index.php/2022/01/21/battery-projects-in-north-america-status-january-2022/ https://battery-news.de/index.php/2022/01/21/battery-project...
rmm 4y ago
I work in hard rock mining. Lithium is opaque market. It’s opening up. Contracts get fixed. Supply costs shoot up. Miners open more mines. Prices collapse. Bigger miners eat smaller miners. Rinse and repeat
- blitzar 4y ago
  This is the way.
tuatoru 4y ago
Lithium Triangle[1]. "a region of the Andes that is rich in lithium reserves, encompassed by the borders of Argentina, Bolivia, and Chile.[1] The lithium in the triangle is concentrated in various salt pans that exist along the Atacama Desert and neighboring arid areas, the largest areas including Salar de Uyuni in Bolivia, Salar de Atacama in Chile, and Salar del Hombre Muerto in Argentina. The area is thought to hold around 54% of the world's lithium reserves." Well, not any more maybe. A large lithium deposit has been dis-covered in Iran as the internationalbanker article notes. (Unusal hyphenation of discovered intentional: it was uncovered, made more widely known, rather than found for the first time ever.) Now that it's in demand, no doubt there are many more deposits of lithium waiting for the limelight. Wikipedia continues: "By one estimate Argentina could displace Chile as the second largest lithium producer by 2027.[3] Similarly, there are estimates the posits [sic] Argentina producing 16% of the World's lithium by 2030, instead of 6% as in 2021.[3] Low royalty payments when compared to Chile are cited by The Economist as a particular advantage.[3]" 1. https://en.wikipedia.org/wiki/Lithium_Triangle https://en.wikipedia.org/wiki/Lithium_Triangle
- euroderf 4y ago
  Purraps a bit like oil ? Reserves depend on prices ?
- odood 4y ago
  And Chile government is making moves towards being more involved in new deals. Not quite nationalization, but...
- rmm 4y ago
  Iran is not a reserve it may well be a resource but a long way from being a Jorc etc reserve. Also that lithium triangle is still a historic artefact of lithiums previous life as a really good lubricant and anti depressant. Given lithiums importance these days, more and more hard rock deposits will be found. For the xth time in yth year There is no lithium shortage. Up until a decade ago we weren’t even looking for it. Now that there is money to be had we will find it.
- rapsey 4y ago
  A huge factor is accessibility of reserves. Often new discoveries are so remote and inaccessible that they are completely unrealistic to be producing within the next 10/20 years. I think both Iran and Argentina fall into this category.
quags 4y ago
Has there been a commodity that has spiked in price due to true lack of supply and non new supplies were found? From peak oil, to copper , lithium and rare earth minerals predictions of we will run out during a price shock always seem to turn into a price collapse.
- mech765 4y ago
  Wooly mammoth prices were pretty expensive for a few years.
- RobotToaster 4y ago
  Helium maybe?
  - mharig 4y ago
    Tritium, too. https://www.researchgate.net/figure/Available-global-tritium-production-and-consumption-rates-for-all-scenarios_fig2_328783024 https://www.researchgate.net/figure/Available-global-tritium...
- Mistletoe 4y ago
  Ethereum after it switched to proof of stake, but it just started. https://ultrasound.money/ https://ultrasound.money/
- ComputerGuru 4y ago
  > [..] and non new supplies were found What do you mean by “non new supplies” being found (or is that a typo)?
midasuni 4y ago
Fed printing money leading to Inflation right? Or does that simplistic answer only apply when prices go up.
canadiantim 4y ago
A loooot of supply coming down the pipe, basically
api 4y ago
The space is saturated with anti-EV FUD.
- aintgonnatakeit 4y ago
  Same thing happens with the gas stove threads. I can’t believe that actual people are that invested in burning hydrocarbons.
  - shlant 4y ago
    [flagged]
    - api 4y ago
      It's sublimated class resentment. People resent things that are perceived as coming down upon them from a coastal rich Ivy League educated elite that is perceived as holding them in contempt. It all just sounds like rich people in private jets flying around telling them to use less energy to save the planet. There is of course too much inequality, but it's not because of EVs or phasing out gas stoves.
      - praxulus 4y ago
        Most Americans already have electric stoves, and its disproportionately higher income people who still cook with gas. I know this is all based more on vibes than facts though.
      - jtbayly 4y ago
        “perceived as holding them in contempt”? They have been told explicitly in prime time TV that they are held in contempt. It’s not an issue of perception on this front.
        rnk 4y ago
        If you want to, you can find coastal elites that dislike anything, even say electric stoves. So what, why do people have all these grievances because of a sense that someone somewhere doesn't like their choices? I'm from the south, I'm positive people there don't like some of my my life choices, I don't go around feeling mad about it. Blaming coastal elites just seems like an excuse to ignore evidence of problematic choices - yet that view also probably doesn't help.
elif 4y ago
Because I see so much "conflict metals" discussion when lithium is discussed, I would like to contribute that less than 3% of global lithium production takes place on small artisanal mines, in which place human rights abuse may occur. Over 85% of lithium is produced by just 2 international corporations with large scale mines complying with multiple international regulation requirements.
- whitemary 4y ago
  >Human rights abuse That's a convenient way to dismiss ruthless exploitation of 3rd world populations, nations, and the natural environment. And if you don't consider the police violence against the indigenous populations of Bolivia following their democratic elections then what are your qualifications exactly? "Lithium mining" is not the problem, of course, but the political interventions of Lithium interests has robbed millions of people of freedom.
  - kranke155 4y ago
    All large scale economic activity in developing countries like this is often accompanied with human rights and democracy violations. This is a false choice really. It’s not lithium that’s causing this but the broken political system. I’m half Brazilian and just the other day I heard a mining dam break that led to a mass cancer in surrounding populations. This was Vale one of the largest companies in Brazil. It doesn’t matter what’s being used, virtually everything that comes from developing countries causes gigantic crimes that are unimaginable to first world. You’re selecting one specific product but it’s not logical to do so. They all cause this. And what’s the other option? Not buying products from developing countries?
- throwawaaarrgh 4y ago
  Because we all know international corporations never violate human rights?
  - refurb 4y ago
    That's kind of a ridiculous argument. Sure, international corporations violate human rights, but unless you provide proof these lithium corporations are, then we can just assume they aren't.
PinkRidingHood 4y ago
What's with the scrolling? Maybe they optimized it for phones but its unnatural on a phone too. And it was a design decision!
azubinski 4y ago
Quite possibly, it's all about simple arithmetic which has always been a bit of a challenge for the brave marketing. Let's assume the data is correct and only three countries produce 119 thousand tons of lithium per year: https://en.wikipedia.org/wiki/List_of_countries_by_lithium_production https://en.wikipedia.org/wiki/List_of_countries_by_lithium_p... Let's assume "from the internet" estimate is at least somewhat correct, and the average EV battery contains 10kg of lithium (this is rounding up the more common 8kg estimate to make it easier to count). The collapse in lithium prices could mean that the electric car market has been overvalued and that the actual production of electric cars is much lower than 12 million, because lithium batteries are not only used in cars. Nothing, over time, prices will still begin to rise. Even though the technology and business of recycling lithium from used batteries will somehow develop. And for sure, this decline will not affect the price of batteries in any way.
asplake 4y ago
About the yellow flame, another explanation would be sodium from the salt. My daughter’s saline nebuliser does that to our cooker, even from the next room.
vrglvrglvrgl 4y ago
[dead]
mharig 4y ago
What the article does not mention: in June a new chinese emission standard for vehicles, that can hardly be met by combustion engines, will hit. That may drive up the Lithium demand. And in 23Q4 or 24Q1 CATL will sell its 500 Wh/kg batteries. Although I couldn't find much about the chemistry of the new cells, that may cut the Lithium demand in half. But not very fast, I guess. (All dates/statements IIRC.)
- alex_duf 4y ago
  Assuming the denser batteries have the same amount of lithium per kg, I don't see how we'll see a halving of lithium demand. That would only be possible under the incorrect assumption that battery demand is static. That's already not true with current technology as EVs are gaining market shares rapidly, but also the new technology will be opening new usages, so it will opening new markets, further driving the demand. But I also have no idea about its chemistry!
  - mharig 4y ago
    Yes, it may cut the Lithium demand in half, if the demand does not change (much), and that is not likely. Sorry for the not so well formulated statement. I meant that that may lower the inclination of the curve of Lithium demand significantly.
binkHN 4y ago
TL;DR: China stopped subsiding this and more mines are coming online.
davidw 4y ago
"Lithium prices depressed"
osigurdson 4y ago
So basically, we can’t switch to EVs because people don’t have enough money. The crowd that thinks poverty is the solution to climate change proven wrong once again.
- s0rce 4y ago
  We could switch to buses, trains and bicycles though, with even greater impact on reducing emissions.
  - osigurdson 4y ago
    Those are all part of the mix, but the car is an essential part of it as well.
singularity2001 4y ago
Fundamentally because it is as ubiquitous as copper and zinc in the earth crust and even more so in sea water.
- tshadley 4y ago
  Earth's crust: not quite the same as Cu/Zn but way more than I expected: https://periodictable.com/Properties/A/CrustAbundance.an.html https://periodictable.com/Properties/A/CrustAbundance.an.htm... Lithium: 0.0017% Copper: 0.0068% Zinc: 0.0078% Seawater: https://sciencenotes.org/abundance-of-elements-in-earths-oceans-periodic-table-and-list/ https://sciencenotes.org/abundance-of-elements-in-earths-oce... Lithium: 0.18 mg/L
s3p 4y ago
This page hijacks scrolling. Unfortunate
deleted 4y ago
[deleted]
TheDudeMan 4y ago
Why does this website scroll differently than every other website? Do not want.
nickpinkston 4y ago
The quote from the article below [1] demonstrates why the doomers, degrowers, Neo-Malthusians, etc. keep getting resource scarcity wrong. They keep quoting the "proven reserves" numbers [2] that only count what is extractable with current tech at current prices, factoring out new technologies / techniques, as well as reserves not discovered yet or discovered but not yet "proven". [1] "But while demand for lithium has been subdued, many believe the expanding supply outlook for the metal is mainly what is pushing prices lower this year, with a wave of fresh supply expected to come online from facilities in China, Australia and Chile. Five analyst forecasts, including ones from Bank of America (BofA), JPMorgan Chase and Morgan Stanley that were reviewed by Bloomberg in mid-January, for instance, anticipated production increases of between 22 percent and 42 percent in 2023 alone. “Supply is coming on stream faster than you can say ‘boo’. Demand remains strong, but prices have been unsustainable for some time now,” analyst Dylan Kelly of Ord Minnett recently told Mining.com." [2] https://en.wikipedia.org/wiki/Proven_reserves https://en.wikipedia.org/wiki/Proven_reserves
- notjes 4y ago
  Yes, resources are infinite. That is why the carrying capacity of the earth is also infinite. Because the ingenuity of humans is infinite.
  - osigurdson 4y ago
    Anti-human nihilist much?
  - sanderjd 4y ago
    See, this is it right here, you're doing it! You're resorting to extremist hyperbole, when what matters are actual details. Resources are not infinite, but that is not relevant. What is relevant is the (finite) amount and the rate at which they are used. To go hyperbolic in the other direction, if there are a trillion accessible grams of something and humanity uses a kilogram a year, then we won't run out for a billion years. But both your hyperbole and mine are pointless. The question can't be answered without the actual details. Your argument is just "resources aren't infinite so we shouldn't use any of them!" That's not a good argument. Another thing people often seem to miss when comparing lithium for batteries to oil for combustion, is that lithium is not a fuel in a battery, it's a vessel. It doesn't get burned up. Whether we can recycle it efficiently enough is a big open question, but it's not gone the way fossil fuels are.
29athrowaway 4y ago
You can get lithium from the sea.
m3kw9 4y ago
More significant supply discovered..
akrymski 4y ago
But lithium only makes up 11% of EV batteries https://www.statista.com/statistics/1203083/composition-of-lithium-ion-batteries/ https://www.statista.com/statistics/1203083/composition-of-l...
- kccqzy 4y ago
  11% by mass, 11% by volume, or 11% by value?
  - akrymski 4y ago
    by mass afaik
cpufry 4y ago
maybe has something to do with the military leadership advising the senate recently about lithium deposits “in our backyard” aka south america
kristianp 4y ago
This report talks about Chinese demand, but there is demand coming online from European auto-makers such as VW which is spending billions to electrify its fleet (not to mention US and Japanese car makers). Copper is another decarbonisation-related element that is predicted to have large shortfalls in supply compared to demand in the future.
elihu 4y ago
> "Mid-February also saw reports emerge that the world’s biggest lithium-ion battery manufacturer, China’s CATL (Contemporary Amperex Technology Co., Limited), had begun offering discounts on batteries sold to certain Chinese EV companies, such as Nio Inc. (NIO) and Zeekr, thus reflecting the ongoing downturn in the lithium price. Such discounts are reportedly being offered to enable CATL’s customers to lock in battery purchases—the most expensive component of EVs—at below-market prices if they agree to purchase at least 80 percent of the batteries they require for their EVs from CATL, on the assumption that lithium-carbonate prices will continue falling significantly." In the U.S. I think this would be quite illegal. I realize China is different, but it's still interesting to see this kind of thing out in the open as if it's normal. (The closest situation I can think of is when Intel was sued by AMD by offering discounts on CPUs to manufacturers that didn't use AMD products[1]. Intel settled with AMD for 1.25 billion dollars.) [1] https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v._Intel_Corp https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v....
kazinator 4y ago
I'm currently on a laptop. Why does one increment of the mouse wheel scroll like four screenfuls on this web page? I'm not gonna use the scroll bar to read your shit; have a nice day.
calacatta 4y ago
Zeihan Zeihan Zeihan Zeihan Zeihan Zeihan. Zeihan Zeihan Zeihan Zeihan Zeihan, Zeihan. Zeihan Zeihan Zeihan? Zeihan! Zeihan Zeihan, Zeihan Zeihan Zeihan, Zeihan Zeihan Zeihan. Zeihan Zeihan Zeihan Zeihan? Zeihan Zeihan.
tetragramaton 4y ago
I first saw on HN itself an article on how it’s possible to extract lithium from seawater. Wondering how scalable it is. Seemed to me like a game changer, possibly. https://electrek.co/2021/06/04/scientists-have-cost-effectively-harvested-lithium-from-seawater/ https://electrek.co/2021/06/04/scientists-have-cost-effectiv... Someone can set up some extractors up in the great eastern garbage patch, and filter plastics ,microplastics, chemicals, etc, whilst extracting lithium.

232 points by xbmcuser 4y ago

The more I read about prices of different commodities the more I realise the biggest movement in prices is not because of demand and supply but rather because of speculation and gambling. And how most of the news is manipulated. For example they are equating lithium price fall with stagnating car sales. Where as car sales might be stagnating but electric car sales are taking a larger portion of total car sales ie electric car sales/lithium use is still increasing.

chii 4y ago
> the biggest movement in prices is not because of demand and supply but rather because of speculation and gambling the movement reflects the expected future supply and demand at the time. The speculation is something that financial engineers use to offload the risks of such commodities from one party to another (such as from producers to consumers of said commodities).
- xbmcuser 4y ago
  With the way derivatives are used these days to speculate/gamble they do not help rather result in the boom bust cycles we see in more and more industries these days.
  - sigstoat 4y ago
    and when exactly do you think that changed? if “these days” are in some sense bad, when were the good ones?
bullen 4y ago
Markets in a high energy cost environement make their margin more on volatility and speculation. You will also see margins themselves widen until the system falls in on itself. We dont have a financial margin tracker. Also increasing interest rates in a highly indebted economy increases inflation; short term by widening of margins and long term by offputting energy extraction. Lithium will explode soonish. Margins amplify volatility.
226_ebro_treaty 4y ago
Wait until you learn about OPEC and oil prices :-)
- KingOfCoders 4y ago
  Because they will change their mind? "demand and supply" OPEC is a cartel constraining supply to increase prices, it's not a free market but an example of "demand and supply" in it's most brutal form. OPEC prices are not about "gambling".
  - jimbob45 4y ago
    OPEC has gambled several times in the last decade on future oil prices (and not always won).
    - KingOfCoders 4y ago
      In which way has OPEC gambled on future oil prices that moved prices? To my limited understanding this would involve buying oil futures.
      - deleted 4y ago
        [deleted]
      - jpgvm 4y ago
        You don't need to use derivatives to gamble, they control the supply but that control is a lagging control. Any decision they make is essentially a bet about where the oil market is going to move in several months. They are usually big enough that any move they make is going to set the tone but that isn't always the case. They need to make continual bets on the health of transports, changes in energy mix etc in order to move or keep the price in a favorable band for them. Misstep and the price of oil falls, cutting into their profits or push it too high and face demand destruction and shale extraction coming online because it's profitable at those higher prices, increasing competition and stifling volumes simultaneously.
- 4y ago
mmiliauskas 4y ago
I personally have an impression, that commodity prices are a function of shocks. Gas prices in Europe, uranium prices in mid 2000s, lithium due to sudden EV demand, etc. World then adjusts, and prices "collapse" or rather stabilize. Basically, don't buy commodities when the price is high.
- taneq 4y ago
  That always bugs me when these things are reported. Something goes up 30% in a year due to speculation and/or supply chain shocks, and then drops by 5% and it's "prices crash!" No it's still up ~25% year on year.
  - mmiliauskas 4y ago
    If media made well adjusted statements, it wouldn't be the media then wouldn't it :D
  - lotsofpulp 4y ago
    Which is why one should stick to obtaining their data from the source and ignore clickbait articles.
  - ipaddr 4y ago
    You are looking at different horizons. It might be up year over year but month over month if it trends down that information is more accurate as to where the future price will grow.
  - j16sdiz 4y ago
    For lithium, it was ~300% up in a year and back to original price in a few months.
  - deleted 4y ago
    [deleted]
bawolff 4y ago
Speculation & gambaling is just second order supply & demand.
- yunohn 4y ago
  If you have massive buy/sell orders between finance bro speculators - how does that equate to real supply/demand for the underlying commodity?
  - jpgvm 4y ago
    There is a finite supply of the underlying, each sold future equates to agreed upon future deliveries. So in reality the number of contracts sold (not traded) does equate 1:1 with demand for the underlying. When that doesn't hold true you will end up with Failure To Deliver (FTD) which causes Very Bad Things™. Generally speaking though commodities markets aren't rigged in the way that people complain about in some other markets but they are subject to pretty violent volatility in the face of uncertainty. This is largely due to pretty fixed supply with highly variable demand. i.e I can't just shut off all the oil wells right now and return ships currently on-route to energy exchanges and even if I could I wouldn't have the storage. Storage is also an interesting one because storage costs money and was pretty much why oil contracts went negative for a short period.
    - RandomLensman 4y ago
      Most future positions are closed out or rolled before delivery - so open interest can easily exceed demand for the underlying.
    - yunohn 4y ago
      All of what you say could be true - I just find it hard to believe given IRL finance bros are constantly trading and profiting off of futures/commodities trading without a single worry of the underlying commodity.
      - hhmc 4y ago
nprateem 4y ago
> speculation and gambling Of course. The net present value of a stock or asset can only be calculated based on its expected future price and earnings. Since there's no way to know this with 100% certainty, stock prices are inherently speculative. Even value investors must struggle to accurately value a company's intangible assets.
- danaris 4y ago
  But there's a material difference between "attempting, in good faith, to determine what the demand for a commodity will be in the future, and buying based on that" and "attempting to determine what the price of a commodity on the futures market will be and buying based on that". When people say that a commodity's price is being driven by speculation and gambling, they mean that it has shifted from the former to the latter. This means that the price is disconnected from the actual, physical use of the commodity, and is instead being driven by the inconstant passions of the commodities market itself.
  - lotsofpulp 4y ago
    >But there's a material difference between "attempting, in good faith, to determine what the demand for a commodity will be in the future, and buying based on that" and "attempting to determine what the price of a commodity on the futures market will be and buying based on that". These are indistinguishable. Unless you want to restrict markets to being only between suppliers and consumers, there will always be middlemen attempting to predict the price, and since they need to eat, they will be attempting to profit from changes in price. Which is fine because suppliers and consumers are many times willing to let others handle the risks of price changes (volatility), hence the market for futures.
    - GolfPopper 4y ago
      Of course there's a difference. It's based on information asymmetry, i.e. the 'greater fool' theory. When the information asymmetry is deliberately created, that's being done in bad faith, and is the sort of thing we call fraud when done on an individual level. It often feels like a great deal of our corporate and financial machinery are designed around diffusing actions that would be criminal, or reprehensible if done person to person, in order to allow them to be done at scale without consequence.
bboygravity 4y ago
It's interesting to see that people still believe there is some type of fair price discovery when things like dark pools, market maker exemptions, naked shorting, tokenized securities, trillions in derrivative bets (hello 2008), spoofing (JP Morgan getting fined 1 billion after making 10 billion in profit in gold price spoofing) and so on and so forth exist. Speculation and gambling about what future prices will be are not the big issues here, the markets themselves are completely broken (by design).
- RandomLensman 4y ago
  What is the issue with a dark pool, for example? They are generally not designed for price discovery anyway.
  - quote 4y ago
    But wouldn’t it be better if the volume at least is shown on open exchanges?
    - JumpCrisscross 4y ago
      > wouldn’t it be better if the volume at least is shown on open exchanges? Empirically, no. Large blocks of stock don’t have a liquid market. Forcing them into the open means chopping it into tiny pieces while using derivatives to hedge, for the sophisticated, and getting hosed, for the unsophisticated.
- Rufbdbskrufb473 4y ago
  You just listed a bunch scary sounding financial buzz words, but I doubt that a thorough analysis of them would support your conclusion. In fact, many have the opposite effect and result in more efficient price discovery. Take naked shorting for example. Without shorting, it would be far more difficult for an equity research firm to be incentivized to look into fraudulent stocks, as was widespread with Chinese companies a few years ago. Without their efforts, stock prices would have remained inflated for longer.
z3t4 4y ago
Monopoly and cartels has the most impact on prices. and the market can not work if there are few partisipants. also gatekeepers, those that stand in between producers and consumers can screw up the market if they have a large potion of the market.
blablabla123 4y ago
Speculating/gambling is a huge factor in anything that can be traded. But commodities also rely on physical deliveries which have influenced prices directly on various occasions. Of course for commodities also the selling side has direct influence on prices. That can go so far that for oil deliveries the tab is opened/closed on convenient times. So understanding prices is significantly more difficult than e.g. for stocks. Also speaking about the news part, a lot of data on commodities isn't freely available so you need to buy it. Trading itself on those is highly restricted - and speculative - anyway. > Where as car sales might be stagnating but electric car sales are taking a larger portion of total car sales ie electric car sales/lithium use is still increasing. I'm quite surprised the article doesn't mention sodium batteries. Li-Ion batteries are notorious for thermal runaways, so CATL and Tesla already shifted to LiFePO batteries quite some time ago. I think everybody would be more than happy to ditch Lithium based batteries altogether.
nurettin 4y ago
Price increase is governed by how much a buyer is willing to pay and how long a seller is willing to hold. That is supply and demand. Their reason to supply or demand is 100% due to speculation or gambling or whatever you want to call it. There is no intrinsic value for anything. Supply and demand is not a magic spell that saves people from guessing what prices should be.
puppymaster 4y ago
car manufacturers seeing the same sales data would then secure lithium supply 12 months ahead for an expected 12x growth, which then turns out to be only 5x. From macro data pov, the graph is still trending up. This is why guidance is important and also why lithium miners hedge against their inventory using future market. Supply and demand still applies, just that its effect is being amplified by overleveraged commodities trading market.
broast 4y ago
You're definitely right that the news loves to write headlines after any daily price fluctuations and pretend they know the reason, when in reality it usually explains nothing and becomes irrelevant by tomorrow.
JumpCrisscross 4y ago
> how most of the news is manipulated. For example they are equating lithium price fall with stagnating car sales Mass media is mostly crap at price-move stories. It’s less manipulation than false correlation. (The writers are incentivised to write, not to write a particular story.) There is a lot of thought that goes into lithium pricing. Current price moves are mostly speculation about supply, given near-term demand can be pretty precisely measured given battery production in operation and breaking ground. (Battery supply limits EV production, which itself outstrips demand, so volatility in consumer demand is tamped at the extraction layer.) Recent debate is about potential supply from brine in China.
tourgen 4y ago
[dead]
marcosdumay 4y ago
> is not because of demand and supply but rather because of speculation and gambling That's what a zero interest rate policy buys you.
rsecora 4y ago
Batteries has a long supply chain, and in this case the market is forecasting a drop in demand. Due to more sources and increase output in the early stages of the chain, the offer has increased. Note also the article refer explicit to EV in different paragraphs . it's described in the article. > with the expiry of a more than decade-long programme of subsidies for EV purchases. > the expanding supply outlook for the metal is mainly what is pushing prices lower this year > Supply is coming on stream faster than you can say ‘boo’. > first-ever lithium deposit to be discovered in Iran’s mountainous western province of Hamedan. At an estimated 8.5 million tonnes, > China is also expanding its lithium-supply capacity from lepidolite, which, while considered the most abundant lithium-bearing mineral,
seizethecheese 4y ago
Your two premises don’t necessarily relate to each other. I believe both: - journalists attribute price changes to whatever story they can find. Sort of like how every day there’s a story of why the Dow moved by a fraction of a percent. - price moves are almost entirely supply and demand. Sure, speculation can change price in the near term, but considering the size of these commodity markets, you’d have to believe an absolutely enormous amount of capital is at play in speculation.
metalspot 4y ago
there are two factors that control market prices: supply elasticity and demand elasticity. commodities with inelastic supply and inelastic demand are prone to very wide price swings. inelastic supply means that increasing prices don't increase supply. in the case of lithium, it take time to bring new production capacity online, so supply is very inelastic in the short term. inelastic demand means that increasing prices do not decrease demand. in the case of lithium, batteries are a very valuable product, and the raw cost of lithium is a small percentage of their total value, so increasing prices for lithium do very little to reduce demand. the price movement here is totally predictable and exactly what you would expect based on standard economic formulas taking into account supply/demand elasticity. it is not speculation or gambling. demand went up, supply lagged, the price spiked, supply increased, the price went back down. electric car sales may still be growing but growing at a lower rate, and projected demand growth is probably decreasing relative to projected supply, so the price is falling.
opportune 4y ago
How so? The people physically purchasing commodities are doing so by determining how worth it is to them at the current (or future) price, same with sellers. Speculators are almost never actually taking delivery, but they are providing liquidity for buyers and sellers by participating in transactions as counterparties. The final price paid by the ultimate physical buyers is based on their own value judgment of quantity demanded per price, and the final price paid to physical sellers is based on that same price (of course, either could be willingly using futures instead of spot prices to reduce risk). Buyers and sellers could trade directly among themselves if they wished, and if the commodity markets were divorced from reality (either unable to deliver on futures contracts or having futures settled at different prices than their contracts stipulate) nobody would use them. Because speculators don’t take delivery, how they react to news and other events is only assisting in price discovery between the time a future is issued and settled, because at settlement time there is no immediate uncertainty regarding supply and demand in the spot market. I think you might be making a common mistake in your comment of equating news for popular consumption with actual news that traders, buyers, and sellers care about (usually very quantitative and well guarded data with nuances that an article for public consumption will never account for). Articles for popular consumption are not moving markets very much, especially in commodities where public involvement is low (vs stocks) and consequently public sentiment has little effect.

Animats 4y ago

Much better article in the Economist this week.[1] [1] https://www.economist.com/business/2023/04/20/why-crashing-lithium-prices-will-not-make-electric-cars-cheaper https://www.economist.com/business/2023/04/20/why-crashing-l...

defrost 4y ago
aka: https://archive.is/k5Hjd https://archive.is/k5Hjd Not a great article (from a minerals and resources perspective). Two specific factors; recent mine expansion at sites that dig in the dirt and produce concentrates _and_ recent and near future expansion of processing locations that take concentrates and refine to ship usable lithium. Eg: Minesite in Western Australia currently ships concentrates to Malaysia and will soon ship also Texas.
- Animats 4y ago
  Shipping concentrates is pretty standard in mining low-grade resources. Near the mine, there's usually some kind of plant to extract the good stuff and discard the dirt. Otherwise, there's a huge amount of wasted effort shipping dirt and rocks around, and dumping them someplace. What's shipped out usually needs more processing. What's left behind is usually the big environmental headache with mining.
  - defrost 4y ago
    Lithium traditionally has seen refinment of concentrates take place some distance from the primary hole in the ground; Western Australia is soon opening refinement facilities "not far" (couple of hundred km) from the primary mine (Greenbushes). Generally digging hole -> concentrate (in this case (Lithium) the concentrate is Spodumene) is a largely mechanical process - crushing, grinding, screening, centrifuge, seperation, etc and what's left behind is overburden and not of interest tailings - this is "regular mining problems" and these are not huge in todays regulated environment, post mining rehab is required and ideally pre mine eco systems come back. Refinement of concentrates, particulalry of Rare Earths is generally where nasty chemicals come into play which requires tight processing and strong oversight to keep "clean" .. acids at end of re-re-re-use need to be nuetralised and processing areas need strong under-pan barriers to prevent spills leaching down to groundwater, tailings dams need to be strong, monitored, and regularly dealt with. These are all things which are "all right" in theory and good practice .. but do require strong oversight and an educated third party invested public keep a close eye on transparent operations. Bad things can happen otherwise.

Yeahsureok 4y ago

No mention of CATL releasing sodium based batteries this year? Just their dropping of lithium battery prices?

_0w8t 4y ago
Sodium batteries will have any effect only in a few years. So this is mostly the case of increased production in anticipation of stronger demand that has not realized. The latter is not necessary an indication of a less demand for batteries. There were a lot of progress recently in increase of the energy density in mass-produced batteries, and that may contributed to lessening of the demand.

atoav 4y ago

Wasn't some country planing to nationalize their lithium stock?

nprateem 4y ago
Chile https://www.ft.com/content/ebd48bbc-1390-4679-99fe-682975bbdba8 https://www.ft.com/content/ebd48bbc-1390-4679-99fe-682975bbd...
- bohadi 4y ago
  Here's some wild speculation grounded on a wisp of research: Eurasia based cartel had cornered the market on lithium vital for new energy. US based interests bent the ear of the Chilean government to break this monopoly by nationalizing these privately owned mines and rediverting the supply. Speculators got wrecked. Does anyone know if a Credit Suisse customer had dealings in Chile?
  - longemen3000 4y ago
    tianqi sold all his shares of SQM (one of Chile lithium companies, around 23%) after the announcement. The situation of the lithium in Chile is very particular. in the Pinochet dictatorship, litium was nationalized, because it was a key ingredient of atomic bombs (and not much else at that time), and USA didn't want other countries to access the resource, so all current mines are in a lease contract (Albemarle until 2043, SQM until 2030). the new proposition opens new zones for exploitation, in exchange of the public-private parnership

_0w8t 4y ago

As Nassim Taleb observed, “Scarity is always followed by glut”.

tuatoru 4y ago
That was a rephrase of the old saw, "the cure for high prices is high prices".
- euroderf 4y ago
  new saw, for this guy
  - tuatoru 4y ago
    Congratulations on being one of today's lucky 10000! [1] 1. https://xkcd.com/1053/ https://xkcd.com/1053/

iamacyborg 4y ago

Nice bit of serendipity there, I’m currently reading a book called Volt Rush that talks about the battery supply chain. Nice to contextualise some of what that’s been talking about with recent events.

noisy_boy 4y ago

Maybe with recycling options coming up[0], availability would be less of an issue and the market is responding accordingly? [0]: https://news.ycombinator.com/item?id=24316056 https://news.ycombinator.com/item?id=24316056

lmpdev 4y ago

Does anyone have any insight into when we're going to see some movements in lithium battery prices per cell? I've seen them stuck at $1-3/cell for what feels like two years

jpgvm 4y ago
Probably not until significantly more capacity is added. Right now all the big battery suppliers (CATL, CALB, EVE, LG Chem, Panasonic) are all at capacity meaning they have no incentive to lower prices. If new capacity comes online and it's not greeted by increased demand (unlikely) then prices could fall. Wouldn't hold my breath though, the targets China has for EVs is going to provide strong support for demand even if the rest of the world goes into recession.
- tuatoru 4y ago
  In 2022-23 several hundred billion USD of investment in new battery production capacity in the USA and Europe was announced in multiple announcements. (Source: cleantechnica, or batteriesnews, or energy-storage.news, or maybe industry weekly; I'll try to find it again. In the mean time, there's this[1]. Edit: and this: battery-news.de[2].) Much of that should come online in 2025 - 28, if not canceled first. Edit 2: there are several steps in the production chain beyond mining and initial refining. There is material production for anodes, cathodes, electrolytes, separators, and lithium; there is cell assembly, there is pack assembly, and there is production of electronics associated with cells and packs (charge controllers, pack management). Each of these has its own issues. It's not as "simple" as refining oil. 1. Chart 1: Lithium-Ion Battery Capacity Expected to Surge, FRB Dallas: https://www.dallasfed.org/research/economics/2022/1011 https://www.dallasfed.org/research/economics/2022/1011 2. https://battery-news.de/index.php/2022/01/21/battery-projects-in-north-america-status-january-2022/ https://battery-news.de/index.php/2022/01/21/battery-project...

rmm 4y ago

I work in hard rock mining. Lithium is opaque market. It’s opening up. Contracts get fixed. Supply costs shoot up. Miners open more mines. Prices collapse. Bigger miners eat smaller miners. Rinse and repeat

blitzar 4y ago
This is the way.

tuatoru 4y ago

Lithium Triangle[1]. "a region of the Andes that is rich in lithium reserves, encompassed by the borders of Argentina, Bolivia, and Chile.[1] The lithium in the triangle is concentrated in various salt pans that exist along the Atacama Desert and neighboring arid areas, the largest areas including Salar de Uyuni in Bolivia, Salar de Atacama in Chile, and Salar del Hombre Muerto in Argentina. The area is thought to hold around 54% of the world's lithium reserves." Well, not any more maybe. A large lithium deposit has been dis-covered in Iran as the internationalbanker article notes. (Unusal hyphenation of discovered intentional: it was uncovered, made more widely known, rather than found for the first time ever.) Now that it's in demand, no doubt there are many more deposits of lithium waiting for the limelight. Wikipedia continues: "By one estimate Argentina could displace Chile as the second largest lithium producer by 2027.[3] Similarly, there are estimates the posits [sic] Argentina producing 16% of the World's lithium by 2030, instead of 6% as in 2021.[3] Low royalty payments when compared to Chile are cited by The Economist as a particular advantage.[3]" 1. https://en.wikipedia.org/wiki/Lithium_Triangle https://en.wikipedia.org/wiki/Lithium_Triangle

euroderf 4y ago
Purraps a bit like oil ? Reserves depend on prices ?
odood 4y ago
And Chile government is making moves towards being more involved in new deals. Not quite nationalization, but...
rmm 4y ago
Iran is not a reserve it may well be a resource but a long way from being a Jorc etc reserve. Also that lithium triangle is still a historic artefact of lithiums previous life as a really good lubricant and anti depressant. Given lithiums importance these days, more and more hard rock deposits will be found. For the xth time in yth year There is no lithium shortage. Up until a decade ago we weren’t even looking for it. Now that there is money to be had we will find it.
rapsey 4y ago
A huge factor is accessibility of reserves. Often new discoveries are so remote and inaccessible that they are completely unrealistic to be producing within the next 10/20 years. I think both Iran and Argentina fall into this category.

quags 4y ago

Has there been a commodity that has spiked in price due to true lack of supply and non new supplies were found? From peak oil, to copper , lithium and rare earth minerals predictions of we will run out during a price shock always seem to turn into a price collapse.

mech765 4y ago
Wooly mammoth prices were pretty expensive for a few years.
RobotToaster 4y ago
Helium maybe?
- mharig 4y ago
  Tritium, too. https://www.researchgate.net/figure/Available-global-tritium-production-and-consumption-rates-for-all-scenarios_fig2_328783024 https://www.researchgate.net/figure/Available-global-tritium...
Mistletoe 4y ago
Ethereum after it switched to proof of stake, but it just started. https://ultrasound.money/ https://ultrasound.money/
ComputerGuru 4y ago
> [..] and non new supplies were found What do you mean by “non new supplies” being found (or is that a typo)?

midasuni 4y ago

Fed printing money leading to Inflation right? Or does that simplistic answer only apply when prices go up.

canadiantim 4y ago

A loooot of supply coming down the pipe, basically

api 4y ago

The space is saturated with anti-EV FUD.

aintgonnatakeit 4y ago
Same thing happens with the gas stove threads. I can’t believe that actual people are that invested in burning hydrocarbons.
- shlant 4y ago
  [flagged]
  - api 4y ago
    It's sublimated class resentment. People resent things that are perceived as coming down upon them from a coastal rich Ivy League educated elite that is perceived as holding them in contempt. It all just sounds like rich people in private jets flying around telling them to use less energy to save the planet. There is of course too much inequality, but it's not because of EVs or phasing out gas stoves.
    - praxulus 4y ago
      Most Americans already have electric stoves, and its disproportionately higher income people who still cook with gas. I know this is all based more on vibes than facts though.
    - jtbayly 4y ago
      “perceived as holding them in contempt”? They have been told explicitly in prime time TV that they are held in contempt. It’s not an issue of perception on this front.
      - rnk 4y ago
        If you want to, you can find coastal elites that dislike anything, even say electric stoves. So what, why do people have all these grievances because of a sense that someone somewhere doesn't like their choices? I'm from the south, I'm positive people there don't like some of my my life choices, I don't go around feeling mad about it. Blaming coastal elites just seems like an excuse to ignore evidence of problematic choices - yet that view also probably doesn't help.

elif 4y ago

Because I see so much "conflict metals" discussion when lithium is discussed, I would like to contribute that less than 3% of global lithium production takes place on small artisanal mines, in which place human rights abuse may occur. Over 85% of lithium is produced by just 2 international corporations with large scale mines complying with multiple international regulation requirements.

whitemary 4y ago
>Human rights abuse That's a convenient way to dismiss ruthless exploitation of 3rd world populations, nations, and the natural environment. And if you don't consider the police violence against the indigenous populations of Bolivia following their democratic elections then what are your qualifications exactly? "Lithium mining" is not the problem, of course, but the political interventions of Lithium interests has robbed millions of people of freedom.
- kranke155 4y ago
  All large scale economic activity in developing countries like this is often accompanied with human rights and democracy violations. This is a false choice really. It’s not lithium that’s causing this but the broken political system. I’m half Brazilian and just the other day I heard a mining dam break that led to a mass cancer in surrounding populations. This was Vale one of the largest companies in Brazil. It doesn’t matter what’s being used, virtually everything that comes from developing countries causes gigantic crimes that are unimaginable to first world. You’re selecting one specific product but it’s not logical to do so. They all cause this. And what’s the other option? Not buying products from developing countries?
throwawaaarrgh 4y ago
Because we all know international corporations never violate human rights?
- refurb 4y ago
  That's kind of a ridiculous argument. Sure, international corporations violate human rights, but unless you provide proof these lithium corporations are, then we can just assume they aren't.

PinkRidingHood 4y ago

What's with the scrolling? Maybe they optimized it for phones but its unnatural on a phone too. And it was a design decision!

azubinski 4y ago

Quite possibly, it's all about simple arithmetic which has always been a bit of a challenge for the brave marketing. Let's assume the data is correct and only three countries produce 119 thousand tons of lithium per year: https://en.wikipedia.org/wiki/List_of_countries_by_lithium_production https://en.wikipedia.org/wiki/List_of_countries_by_lithium_p... Let's assume "from the internet" estimate is at least somewhat correct, and the average EV battery contains 10kg of lithium (this is rounding up the more common 8kg estimate to make it easier to count). The collapse in lithium prices could mean that the electric car market has been overvalued and that the actual production of electric cars is much lower than 12 million, because lithium batteries are not only used in cars. Nothing, over time, prices will still begin to rise. Even though the technology and business of recycling lithium from used batteries will somehow develop. And for sure, this decline will not affect the price of batteries in any way.

asplake 4y ago

About the yellow flame, another explanation would be sodium from the salt. My daughter’s saline nebuliser does that to our cooker, even from the next room.

vrglvrglvrgl 4y ago

[dead]

mharig 4y ago

What the article does not mention: in June a new chinese emission standard for vehicles, that can hardly be met by combustion engines, will hit. That may drive up the Lithium demand. And in 23Q4 or 24Q1 CATL will sell its 500 Wh/kg batteries. Although I couldn't find much about the chemistry of the new cells, that may cut the Lithium demand in half. But not very fast, I guess. (All dates/statements IIRC.)

alex_duf 4y ago
Assuming the denser batteries have the same amount of lithium per kg, I don't see how we'll see a halving of lithium demand. That would only be possible under the incorrect assumption that battery demand is static. That's already not true with current technology as EVs are gaining market shares rapidly, but also the new technology will be opening new usages, so it will opening new markets, further driving the demand. But I also have no idea about its chemistry!
- mharig 4y ago
  Yes, it may cut the Lithium demand in half, if the demand does not change (much), and that is not likely. Sorry for the not so well formulated statement. I meant that that may lower the inclination of the curve of Lithium demand significantly.

binkHN 4y ago

TL;DR: China stopped subsiding this and more mines are coming online.

davidw 4y ago

"Lithium prices depressed"

osigurdson 4y ago

So basically, we can’t switch to EVs because people don’t have enough money. The crowd that thinks poverty is the solution to climate change proven wrong once again.

s0rce 4y ago
We could switch to buses, trains and bicycles though, with even greater impact on reducing emissions.
- osigurdson 4y ago
  Those are all part of the mix, but the car is an essential part of it as well.

singularity2001 4y ago

Fundamentally because it is as ubiquitous as copper and zinc in the earth crust and even more so in sea water.

tshadley 4y ago
Earth's crust: not quite the same as Cu/Zn but way more than I expected: https://periodictable.com/Properties/A/CrustAbundance.an.html https://periodictable.com/Properties/A/CrustAbundance.an.htm... Lithium: 0.0017% Copper: 0.0068% Zinc: 0.0078% Seawater: https://sciencenotes.org/abundance-of-elements-in-earths-oceans-periodic-table-and-list/ https://sciencenotes.org/abundance-of-elements-in-earths-oce... Lithium: 0.18 mg/L

s3p 4y ago

This page hijacks scrolling. Unfortunate

deleted 4y ago

[deleted]

TheDudeMan 4y ago

Why does this website scroll differently than every other website? Do not want.

nickpinkston 4y ago

The quote from the article below [1] demonstrates why the doomers, degrowers, Neo-Malthusians, etc. keep getting resource scarcity wrong. They keep quoting the "proven reserves" numbers [2] that only count what is extractable with current tech at current prices, factoring out new technologies / techniques, as well as reserves not discovered yet or discovered but not yet "proven". [1] "But while demand for lithium has been subdued, many believe the expanding supply outlook for the metal is mainly what is pushing prices lower this year, with a wave of fresh supply expected to come online from facilities in China, Australia and Chile. Five analyst forecasts, including ones from Bank of America (BofA), JPMorgan Chase and Morgan Stanley that were reviewed by Bloomberg in mid-January, for instance, anticipated production increases of between 22 percent and 42 percent in 2023 alone. “Supply is coming on stream faster than you can say ‘boo’. Demand remains strong, but prices have been unsustainable for some time now,” analyst Dylan Kelly of Ord Minnett recently told Mining.com." [2] https://en.wikipedia.org/wiki/Proven_reserves https://en.wikipedia.org/wiki/Proven_reserves

notjes 4y ago
Yes, resources are infinite. That is why the carrying capacity of the earth is also infinite. Because the ingenuity of humans is infinite.
- osigurdson 4y ago
  Anti-human nihilist much?
- sanderjd 4y ago
  See, this is it right here, you're doing it! You're resorting to extremist hyperbole, when what matters are actual details. Resources are not infinite, but that is not relevant. What is relevant is the (finite) amount and the rate at which they are used. To go hyperbolic in the other direction, if there are a trillion accessible grams of something and humanity uses a kilogram a year, then we won't run out for a billion years. But both your hyperbole and mine are pointless. The question can't be answered without the actual details. Your argument is just "resources aren't infinite so we shouldn't use any of them!" That's not a good argument. Another thing people often seem to miss when comparing lithium for batteries to oil for combustion, is that lithium is not a fuel in a battery, it's a vessel. It doesn't get burned up. Whether we can recycle it efficiently enough is a big open question, but it's not gone the way fossil fuels are.

29athrowaway 4y ago

You can get lithium from the sea.

m3kw9 4y ago

More significant supply discovered..

akrymski 4y ago

But lithium only makes up 11% of EV batteries https://www.statista.com/statistics/1203083/composition-of-lithium-ion-batteries/ https://www.statista.com/statistics/1203083/composition-of-l...

kccqzy 4y ago
11% by mass, 11% by volume, or 11% by value?
- akrymski 4y ago
  by mass afaik

cpufry 4y ago

maybe has something to do with the military leadership advising the senate recently about lithium deposits “in our backyard” aka south america

kristianp 4y ago

This report talks about Chinese demand, but there is demand coming online from European auto-makers such as VW which is spending billions to electrify its fleet (not to mention US and Japanese car makers). Copper is another decarbonisation-related element that is predicted to have large shortfalls in supply compared to demand in the future.

elihu 4y ago

> "Mid-February also saw reports emerge that the world’s biggest lithium-ion battery manufacturer, China’s CATL (Contemporary Amperex Technology Co., Limited), had begun offering discounts on batteries sold to certain Chinese EV companies, such as Nio Inc. (NIO) and Zeekr, thus reflecting the ongoing downturn in the lithium price. Such discounts are reportedly being offered to enable CATL’s customers to lock in battery purchases—the most expensive component of EVs—at below-market prices if they agree to purchase at least 80 percent of the batteries they require for their EVs from CATL, on the assumption that lithium-carbonate prices will continue falling significantly." In the U.S. I think this would be quite illegal. I realize China is different, but it's still interesting to see this kind of thing out in the open as if it's normal. (The closest situation I can think of is when Intel was sued by AMD by offering discounts on CPUs to manufacturers that didn't use AMD products[1]. Intel settled with AMD for 1.25 billion dollars.) [1] https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v._Intel_Corp https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v....

kazinator 4y ago

I'm currently on a laptop. Why does one increment of the mouse wheel scroll like four screenfuls on this web page? I'm not gonna use the scroll bar to read your shit; have a nice day.

calacatta 4y ago

Zeihan Zeihan Zeihan Zeihan Zeihan Zeihan. Zeihan Zeihan Zeihan Zeihan Zeihan, Zeihan. Zeihan Zeihan Zeihan? Zeihan! Zeihan Zeihan, Zeihan Zeihan Zeihan, Zeihan Zeihan Zeihan. Zeihan Zeihan Zeihan Zeihan? Zeihan Zeihan.

tetragramaton 4y ago

I first saw on HN itself an article on how it’s possible to extract lithium from seawater. Wondering how scalable it is. Seemed to me like a game changer, possibly. https://electrek.co/2021/06/04/scientists-have-cost-effectively-harvested-lithium-from-seawater/ https://electrek.co/2021/06/04/scientists-have-cost-effectiv... Someone can set up some extractors up in the great eastern garbage patch, and filter plastics ,microplastics, chemicals, etc, whilst extracting lithium.