Lithium price

What is lithium exactly?

Lithium, also referred to as Li, is a chemical element coming from the Alkali metal group*. It is the lightest of the solid elements. The metal itself is soft, white and shiny. Different alloys* and connections of itself are produced at an industrial scale. Lithium is very rare and only covers about 0,002% of the earth’s crust.

In nature, it can be found as a mixture of the isotopes Li-6 and Li-7. It is, as mentioned, the lightest of the solid metals, it is soft and very reactive. But it also has a low melting point.

*Alaki metal  group: One of the six chemical elements that are part of group 1 of the periodic table. The se six are lithium (Li), sodium (Na), potassium (K), rubidium (Rb), cesium (Cs) and enfrancium (Fr).

*Alloy: Metal-like substances that are composed of two or more elements. They are a connection. This is produced by melting the mixture of the ingredients.

The history of lithium

Lithium is discovered from a mineral, while a lot of other common alkali metals were discovered from plant-based material. This way the term lithium also arose. It comes from the Greek word for stone: Lithos.

The first lithium mineral flower leaf that was separated came from the Swedish island Utö by a Brazilian: Jozé Bonifácio de Andralda e Silva in the 1790s. What exactly happened was this: An intense crimson red flame came from the fire when the leaf was thrown into it. It lasted until 1855 before the chemic was able to get molten lithium chloride through electrolysis.

When this discovery was known, people started discovering it in all types of different natural things such as grapes, seaweed, tobacco, vegetables, milk and blood.

What does lithium look like exactly?

Lithium looks very soft and silvery. It has the lowest density among all metals and is reacts heavily when exposed to water. It is the head of group 1, the alkali metal group. Storing lithium is a huge, known problem. Because it cannot be kept under petroleum (such as sodium), because it is less dense and floats. It can only be stored by covering it in something like Vaseline.

Properties of lithium

When we look at the most important properties of lithium, we get the following:

• It has a high specific heat (caloric value)

• High temperature intervals in the liquid phase

• High thermic conductivity

• Very low density

• In metal form, lithium is solvable (in e.g. Alifatic amines)

• Insolvable in hydrocarbons

Applications of lithium

In what ways can lithium be applied and what value does this have? This is an interesting question, to which there is a very short answer possible. Nowadays, lithium is used often in, for example, rechargeable batteries in mobile phones, laptops and cameras. Lithium is also used in some non-rechargeable products like pacemakers, toys and clocks.

Alloy of lithium

Lithium metal is made into alloys together with aluminum and magnesium. This makes them a lot stronger, but also lighter. A magnesium-lithium alloy is used for, among other things, armor for vehicles. You can think about airplanes and high speed trains, for example.

Medicine and lithium

Lithium can also be found in the field of medicine. Google the word lithium and you can find a whole batch of different medication that contains lithium. One that is used to treat manic depressions for example is lithium carbonate. The function of it on the brain is, however, not completely understood yet.

Is lithium poisonous?

Lithium is averagely poisonous. This was discovered in the 40s, when patients got lithium chloride as a replacement for salt. It was prescribed in small doses in the treatment for manic depressions, because it had a calming effect on the brain. It seems that lithium knows how to prevent, or calm down, overproduction of the brain.

Lithium in commercial use

In the commercial world, lithium can be found in an abundant number of places. Lithium oxide is used in glass and ceramics. Lithium metal is used in alloys together with magnesium and aluminum and used in armor.

But also 3 volt batteries (or higher voltages), have lithium in them. When compactness and a light weight is of utmost importance, lithium is the best available element.

Lithium in nature

Lithium as a metal cannot be found in nature, but almost all igneous rocks and water of mineral sources contain small amounts of lithium. You can think of spodumene, petalite, lepidolite and amblygonite, the most important minerals where lithium can be found.

Lithium in the financial sector

The expectations in the financial sector, or the stock exchange are theorized with various outcomes. We expect the theory and perspectives of Miller from Oilandgas360.com to be the fairest. He expects a continuous growth for lithium, with high rises in 2021-2022. The reason that he gave for this is the increasing demand for electric vehicles in the future.

Investing in the raw material lithium

There are currently a couple of choices you can make to invest in the lithium market. It is, however, almost impossible to buy a physical supply of lithium. You can invest in companies that occupy themselves with mining and more specifically the production of lithium. Or you invest in a special lithium-EFT, a group of raw material producers offer these.

The fact that lithium is used globally is nothing new, but because the demand for it increases, more people find this an interesting opportunity. Even though it isn’t a precious metal like gold, silver, bronze or platinum, a lot of companies do see huge advantages in lithium.

Breakthrough of lithium. Does it influence the price?

Lithium has had a breakthrough in the last couple of years, now that a lot of environmental laws have been passed to increase security. There is a large demand for energy friendly transportation, such as the electric car and lithium is a very good element to be used in this phenomenon. This is the reason that a lot of investors hurry and add lithium to their portfolio.

Lack of transparency in the lithium price

The raw material price of lithium always has been in a bit of a discussion. There is not much transparency when it comes to this. Investors cannot invest in lithium directly, because it is not traded at any stock exchange. The only way to invest in lithium is through listed lithium companies. And this makes it so, that the actual price of lithium is not very visible.

Because lithium is not traded publicly and there are only a couple of producers of lithium, it is very hard to understand the true market value. According to Rich Messina (director of JPM New York City) is lithium definitely a part of the world economy of today. Source: Money, usnews.com.

Although investing in lithium could be a strategy to widen your portfolio, this metal is subject to the volatility of supply and demand and a small range of choices of investments.

If you want to know more about raw material prices of gold, silver, platina, bronze or copper? Read our articles. You can also find more information about investing in various raw materials such as gold.

The last year gave us this

In 2021, we saw the price of lithium skyrocket. This is mainly because of the increase in demand for this raw material. We are using more and more batteries that use it, but it is also used for the production of electric cars. The price difference is becoming very large. In 2018 you were able to buy lithium for 28 euro per kg, whereas now it is almost tenfold at 250 euro per kg. The upcoming years, the electric cars will increase in price, but we might also see this in consumer electronics. The corona crisis has caused the shutdown of several lithium mines, which caused a shortage of lithium in the last two years.

The price of lithium will go up in 2022

The expectation for the price of lithium in 2022 is not positive. The demand for this raw material will keep rising, which creates scarcity and a higher price for it. According to researchers, the main cause of this is the electric car industry. It is expected that about 90% of lithium globally will be used for this by 2030. Roskill even estimates, that the demand will rise at 25% per year. The largest part of this raw material comes from Chili and Australia. But you cannot simply scale up when needed, because it has to be mined first from the lithium mines. It is a tough job with very little available personnel, that also has to work safely.