The price of lithium, which is used in batteries for electric vehicles and large energy storage systems, fell by about 14% this week amid concerns about the prospects for demand for this metal, Bloomberg reports.
Quotations of lithium carbonate contracts on the Guangzhou Stock Exchange fell below 100,000 yuan ($14,900) per ton during trading on Thursday, after which they partially recovered the decline and ended the session at 104,400 yuan per ton, which is 3.6% lower than the previous day's closing level.
The downward trend in the market has been maintained since the end of August. The situation escalated earlier this week when the European Union and China agreed to limit exports of hybrid cars to the EU. This has reinforced long-standing concerns about demand for both electric vehicles and large-scale energy storage systems. Lithium futures have fallen in price by 37% over the past seven weeks.
"The acceleration of falling prices in the industry is forming a consensus that the market has entered a bearish phase," says an analyst at China Futures Co. Zhang Weixin.
Similar concerns are expressed by Goldman Sachs experts. Last week, they predicted that the lithium market would move from a deficit to near equilibrium in the fourth quarter, with a surplus forming in the next two years. According to analysts, the slowdown in the production of electric vehicles and energy storage systems reduces the need for warehousing.
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