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  • Remember the Lithium Shortage & Huge Price Spike? In the Four Months Since, Lithium Collapsed 70% Amid Talk of Lithium Glut

Remember the Lithium Shortage & Huge Price Spike? In the Four Months Since, Lithium Collapsed 70% Amid Talk of Lithium Glut

May 01, 2023

by Wolf Richter Wolf Street

Fits with Tesla’s big price cuts, aimed at internal-combustion-engine vehicles.

Lithium is no exception. The spot price of lithium carbonate 99.5% battery grade, trading in Shanghai and serving as a key benchmark, spiked by 590% in 16 months, and then collapsed spectacularly in four months. Over the last couple of days, it seems to have found a bottom. Like so many commodities, it didn’t collapse all the way back to the starting point of the price spike – at least not yet.

The price spike started in July 2021. At the time, it had been trading at 87,000 CNY per tonne. On November 11, 2022, it hit 600,000 CNY, a ridiculous gain of 590%. Then it lost its grip, speculation blew up, and the price plunged 72% in nearly a straight line, before ticking up for the first time.