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China’s CATL, Ganfeng lock in supplies of lithium as price of key battery metal touches record high
- Lithium carbonate prices in China are at record highs after a nearly fivefold increase in the past year
- CATL outbid Ganfeng Lithium for Canada’s Millennial Lithium, while its Chinese rival bought Mexico’s Bacanora Lithium in August
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Lithium is having a moment – and record prices will not deter the flurry of deals for the key battery metal.
A number of acquisitions of lithium miners have been announced in recent months, including a proposed takeover of Millennial Lithium by the world’s largest battery maker. Industry consultants, investment bankers and analysts see this as just a taste of things to come, even with skyrocketing prices for the silvery white metal that is a key ingredient to power electric vehicles.
Lithium carbonate prices in China are at record highs after a nearly fivefold increase in the past year, BloombergNEF analysts said on Wednesday in a note. The price of Chinese lithium shipped abroad has also climbed because of tight supply and stable battery demand, though at a slower pace than the domestic surge due to the absence of a spot market, according to the analysts.
The rally comes as a global push for less polluting energy sources that has carmakers and battery manufacturers racing to secure supplies of so-called future-facing commodities including lithium, copper and nickel. Two Chinese companies sparked a bidding war for Canada’s Millennial, which has lithium assets in Argentina, with Contemporary Amperex Technology (CATL) eventually outbidding Ganfeng Lithium.
That bidding war “is just a taste of what’s to come”, said Chris Berry of House Mountain Partners, a Washington-based industry consultancy. “I do see more mergers and acquisitions even at existing pricing.”
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