Lithium may experience greater price competition

Lithium is in a class of its own. While almost every other metal is selling at substantially less than its 1973 price, lithium is doing the opposite.

The 1993 price of lithium carbonate (in constant 1987 prices) was US$1.65 per lb., compared with US$1.68 in 1983 and US$1.31 in 1973, Roskill Information Services Ltd. of London says in its study The Economics of Lithium 1994.

In contrast, metals such as aluminum, antimony, chromium, zinc and zirconium have all fallen in price.

Lithium carbonate is the benchmark in the market for lithium chemicals and metal because nearly all lithium products are derived from it. There is also a market, though it is considerably smaller, for lithium in the form of ore and concentrates.

The reason, Roskill says, for the resilience in the price of lithium carbonate, is the long dominance of the market by three companies: FMC Lithium Division, Cyprus Foote and Chemetall. The main factor ensuring the continuation of this control has been the complexity and diversity of downstream lithium products, and the limited number of sources of raw materials.

There are four new factors in the lithium carbonate market which may lead to greater competition:

– FMC has decided to develop a new large brine source in Argentina. – A second large brine source in Chile is being developed by Soquimich. – Gwalia is to build a new lithium carbonate plant in Australia. – Pacific Lithium of New Zealand recently announced a new low-cost method of extracting lithium values from seawater or geothermal brines, and plans to license its process to producers running small-scale plants in a number of overseas countries.

In terms of usage, Roskill foresees possible gradual growth in glass and ceramics. The outlook for lithium in greases is stable, while demand for aluminum production will continue to decline. The researcher also projects growth in battery demand and continuous growth in the high-value end uses for other lithium compounds.

For more information, write Roskill at 2 Clapham Road, London SW9 0JA, U.K.