Lithium market participants seek new ways to price seaborne term contracts amid supply crunch

Lithium market participants across the supply chain are increasingly keen to move away from fixed prices or trade data-linked indices in their long-term contracts for seaborne units and toward a floating pricing mechanism. This comes at a time when the lithium market is estimated to remain at a deficit in 2022, sources said.

The Covid-19 pandemic unexpectedly propelled an acceleration in the adoption of electric vehicles (EVs). Major economies across the globe began to look to the electrification of transport as a means of stimulating economic recovery in the pandemic’s aftermath while also cutting the transport sector’s carbon footprint.
Both Europe and the United States have taken determined steps toward developing sustainable mobility with Europe introducing enhanced incentives for EV adoption and the US targeting a 50% zero-emission new vehicle sales goal by 2030. And in China – currently the front-runner in the shift to the electrification of transport – the EV market has continued to expand its market share in the country.
In the first ten months of 2021, EV output and sales in China rose nearly two-fold from the same period last year, and the penetration rate reached 16.4%, data from China Association of Automobile Manufacturers (CAAM) showed.

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Susan Zou

Dalila Ouerghi

November 30, 2021

14:37 GMT

London, Shanghai