Tuesday, February 23, 2016

Electric cars send lithium prices soaring

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For once, we have agreement across the board on a commodity: Demand for lithium will continue to rise throughout the year--and beyond--spurred by the rise of battery mega/gigafactories and a burgeoning energy storage business that will change the way we live.

That’s why Goldman Sachs calls lithium the “new gasoline”. It’s also why The Economist calls it “the world’s hottest commodity”, and talks about a “global scramble to secure supplies of lithium by the world’s largest battery producers, and by end-users such as carmakers.”


In fact, as the Economist notes, the price of 99%-pure lithium carbonate imported to China more than doubled in the two months to the end of December—putting it at a whopping $13,000 per ton.

My lithium producer Orocobre continues to slowly but surely increase production. This should lead to increased cashflow as long as prices stay high. We may also see a takeover at some point. 

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