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Lithium price tops out as China EV sales slow

Analysts forecast raw material and battery supply gluts

Employees grab carbonate lithium processed at an Argentine plant in 2021. Prices for the mineral are falling after dozens of Chinese companies scrambled to get a piece of the booming market in 2022.   © Reuters

Companies along China's electric vehicle (EV) supply chain, from miners to battery-makers and car companies, have been riding high on an EV buying spree. And the price of lithium, a key raw material in most electric car batteries, has soared in tandem, drawing billions in capital from a diverse group of investors. But the wave of demand downstream is breaking, leading analysts and industry insiders to predict a supply glut and plunging prices of the metal this year.

The spot price of lithium carbonate spent almost two years rocketing up, reaching a record high of around 600,000 yuan ($85,530) per ton in November -- close to 12 times the price at the start of 2021 -- as demand outpaced supply, creating unprecedented profits for miners.

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