Australian lithium prices rocket by a further 45.5% in January

Prices of Australia’s lithium-rich spodumene concentrate surged by 45.5% in January, extending a record-breaking 15-month rally in lithium prices which could go even further according to experts.

Price reporting agency Benchmark Mineral Intelligence (BMI) said Australian spodumene concentrate was selling at US$2,400 per tonne in January, up from $1,650 per tonne in December.

The price has risen by a remarkable 478.3% to what it was in January 2021, when Joe Biden kickstarted his US presidency with a plan to boost electric vehicle sales amid a broader $2 trillion green industrial revolution.

Since then, lithium production has struggled to keep pace with the recovery in demand, with BMI reporting that extremely low inventory levels across all lithium products were prompting customers to pay increasingly higher prices.

Western Australia (WA) is the world’s top spodumene supplier – primarily exporting concentrate to chemical refining hubs in China. WA’s mining industry has predicted further tightness in supply as COVID-19 spreads through the state and exacerbates an existing labour shortage at a time of year when cyclones have traditionally halted production and shipments.

Any disruption in the coming months should support a higher spodumene price. BMI also said lithium carbonate and hydroxide prices had risen by more than 34% and 36% respectively in January, adding that those rallies had not yet been factored into the spodumene price it reported for last month.

“Given that many spodumene contracts are tied to chemical pricing, Benchmark expects spodumene pricing to maintain upwards momentum in the first quarter of 2022,” BMI said in a note on Friday.