Reach us Lithium price is rising and LFP is overtaking the NMC market

According to global media sources, the exponential rise of electric cars (EVs) and demand for energy storage systems have worsened the shortage of lithium batteries. Lithium cells price is rising higher day by day because of overdemand by battery manufacturers and EV manufacturers. They have a fear of an even greater shortage of lithium in the future so stocking the lithium cells is the only option they have. In this piece of content, we will explore why there is a shortage of lithium in the market and how the market is responding to this shortage.

According to the sources, the EV industry is growing so quickly that upstream materials suppliers are unable to keep up with the growing demand. The exponential growth of material costs over acceptable levels is a problem for the entire industry. Some suppliers have even pushed the Chinese government to interfere and stabilize pricing.

According to media sources, EV Manufacturers adjusted their procurement tactics in 2022 to escape Tier 1 supplier domination.

Battery manufacturers are ramping up production and placing one to three times more orders with material suppliers than usual. Raw materials like Nickel and Cobalt providers are facing the biggest strain in the supply chain.

Despite this, lithium battery and mineral prices are unlikely to climb as quickly as materials prices. But the prices will rise consistently as the market is reaching instability.

Another concern is the availability of electric vehicle chargers. In China, the ratio of EVs to charging piles remains at 3:1, and EV growth continues to outstrip charger growth. Even if the latter’s number rises, it’s unclear whether there will be enough steady electricity to power the chargers.

Multiple pressures are exerted on the battery supply chain. The supply end’s bubbles are likely to break if terminal demand declines. When this happens, organizations with insufficient financing may find themselves in a situation where they will unable to afford the rising price. It does matter how much market share they have, what only will matter at that time is if they can produce enough cash to fulfil the price.

Shortage of Lithium in market: Not enough metal to meet the market demand

Another concern is the availability of electric vehicle chargers. In China, the ratio of EVs to charging piles remains at 3:1, and EV growth continues to outstrip charger growth. Even if the latter’s number rises, it’s unclear whether there will be enough steady electricity to power the chargers.

Multiple pressures are exerted on the battery supply chain. The supply end’s bubbles are likely to break if terminal demand declines. When this happens, providers with insufficient financing may find themselves unable to afford price rises. The price is rising almost every day, so it doesn’t matter how much market share you have but it’s all about can you afford that day’s price of lithium?

However, the lithium extraction method, as well as a lack of investment, have struggled to keep up with expanding demand.

Lithium extraction is difficult since it requires either mining the ore and then separating the metal, or pumping subsurface water deposits to the surface and extracting the metal from pools. A battery production facility can be built in 1 or 2 years, but a lithium project can take up to a decade to get off the ground.

The United States intends to increase local lithium production, but it presently generates less than 2% of the global supply. The majority of lithium mining and reserves are in South America and Australia, while China dominates global supply networks.

As far as the Indian market is concerned, the situation doesn’t seem very good. As of now, India is fully dependent on China for lithium cells. So Indian market is going to experience a much larger impact.

Apart from this you you want to know Why Lithium Price is Rising in the Global Market, you can read this article

https://inverted.in/blog/why-lithium-price-is-rising-around-the-globe