Lithium companies are dropping today as prices for the metal soften in Asia.
As of 12:30 p.m. ET, SQM (NYSE:SQM) is down 4.17% to $76.44, Albemarle (NYSE:ALB) is off 2.49% to $221.45 and Patriot Battery Metals (CVE:PMET) has lost 10.3% to trade at $5.92.
According to a note published by Platts, the COVID-19 outbreak in China has spooked markets and traders are "eager to offload cargoes." On December 30 Platts assessed lithium carbonate at Yuan 520,000/mt, down 23,000/mt on the week.
"Destocking activities have also continued to push down prices as traders would prefer to have cash on hand over stock heading into 2023," wrote Platts last week.
Lithium has been on a tremendous run, up ten-fold since the start of the decade according to Benchmark Minerals Intelligence assessment. In December Chris Berry from House Mountain Partners said a similar leap is unlikely, but there won't be a fall.
"I would argue that the likelihood that you see a 10x in lithium pricing out over the next two years uh just like we've seen over the previous two years is obviously very unlikely," said Berry.
"I wouldn't be at all surprised just to see lithium really be range bound from a price perspective. Maybe there's a little bit of downside but by no means will we see the collapse that some banks are forecasting," added Berry.
