Global Lithium Metal Persist Declining Price Trend Amidst sluggish Downstream Market Demand

In Jan 2024, the lithium Metal market holds the declining price trend across the globe amidst the plunging downstream battery market. The mining of Lithium Metal has been on a higher edge, as the major consumer nations, such as China, India, USA, and several European nations are placing new deals to expand the extraction rate in the major mining countries. The Indian government has been in talks with the Argentina government to buy 5 new mining sites for a survey of potential deposits of Lithium Metal. Meanwhile, the end-of-use electric vehicle industry will keep the market firm as the sales were high in the European market. The inventory level of Lithium Metal remained oversupplied across the globe, impacting a pessimistic market sentiment. The market players assume that Lithium Metal will show a similar trend at least until the 1st quarter of 2024 as the supply rate remains on a higher edge.

Participants throughout the lithium supply chain have been engaging in speculation regarding the bottom price of Lithium Metal, a crucial raw material for the production of lithium chemicals, amidst sustained price weakness. The rapid decline in Lithium Metal prices can be largely attributed to the softening prices of downstream chemicals and an abundant supply of Lithium Metal, intensifying the bearish sentiment in the market. The prices of Upstream Lithium hydroxide and Lithium carbonate have notably experienced a substantial 80% decrease from the previous year's January 2023 data, contributing to a dampening price trend.

In the global pursuit of advancing green energy facilities in international markets, the Indian government has initiated discussions with the Argentina government to acquire five new Lithium blocks in Argentina. As per the information released by the Indian Press Information Bureau in collaboration with the Ministry of Mines, a transaction valued at INR 200 crores has been formalized. This agreement was executed between Khanij Bidesh India Limited (KABIL) of India and CAMYEN SE of Argentina on January 15, 2024. This deal aims to enable India to explore these mines, enhancing its lithium supplies and fostering the development of lithium mining and downstream sectors in both nations. This strategic move is geared towards reducing India's reliance on China for its Lithium Metal supplies. Simultaneously, the US government has entered into new initiatives to boost Lithium Metal extraction in Nevada. The major downstream battery materials company, American Battery Technology Company, based in the USA, has recently placed new deals to expand production at its Tonopah Flats Lithium Project (TFLP) in Nevada, USA. These advancements have resulted in the sustenance of elevated inventory levels, leading to cautious orders from buyers globally.

According to ChemAnalyst, the price of Lithium Metal will continue a declining trend throughout the 1st quarter as the supply rate will remain surplus, along with a weaker downstream demand rate. The mining activity is expected to increase as the governments of various nations have been planning on shifting to green energy and battery usage in vehicles, giving hope for a better future market for Lithium Metal across the globe.