Lithium price drops for first time in eight months amid Covid disruption

What’s new: The surge in lithium prices slowed on Tuesday for the first time in eight months, reflecting weaker demand from automakers amid prolonged pandemic shutdowns and seasonal factors.

The price of battery-grade lithium carbonate fell 4,000 yuan ($628) to 496,000 yuan a ton on Tuesday, ending eight months of gains since July. It was the first time since March 4 that the price of the material fell below 500,000 yuan per ton.

The context: The price of lithium has jumped nearly 500% in the past year as demand for electric vehicles accelerated around the world.

Industry sources said the price drop mainly reflects disruptions at major electric vehicle factories as China locks down cities to battle its worst Covid-19 outbreaks in more than two years.

Major electric car makers including Tesla Inc. and Nio Inc. have suspended production in Shanghai due to the shutdowns. Virus restrictions in other cities have also affected auto parts suppliers and disrupted production at major automakers.

The end of the supply season and increased supplies are also helping stabilize lithium, analysts said.

Quick Takes are condensed versions of China-related stories for quick news that you can use.

Contact reporter Han Wei ([email protected]) and editor Bob Simonon ([email protected])

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