Lithium goes from boom to bust

There are signs of an oversupply of lithium – the metal used for EV batteries.

Transparent and blue lithium battery with four cells on a black background
(Image credit: Getty Images)

Lithium prices have plunged by 75% this year and the rout seems “far from over”, say Yvonne Yue Li and Annie Lee at Bloomberg. The white-coloured metal is a key ingredient in lithium-ion batteries. Excitement about demand for these batteries from electric vehicles (EVs) drove a huge rally during COVID-19. The price of Chinese lithium carbonate leapt by 1,400% between late 2020 and November 2022. But over the past year prices have receded amid signs of a glut.

Shares in US-listed Albemarle, the world’s biggest lithium miner, have plunged by more than 50% in a year. It mines lithium in Chile, Australia and the US. After mining, most of the metal is processed in China, making Chinese lithium prices the industry benchmark.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.