WHAT IS IT?
Lithium (Li) is the lightest metal and the least dense solid element. It is soft, silvery-white, and highly reactive — it must be stored in oil as it reacts violently with air and water. Lithium is the critical mineral enabling the global EV transition — every lithium-ion battery cell requires lithium in the cathode and/or electrolyte.
SUPPLY CHAIN
Two primary ore types:
• Spodumene (hard rock): Mined primarily in Australia (Pilbara Minerals, Allkem). Converted to lithium chemicals via acid roasting.
• Brine (salar): Pumped from underground saltwater in Chile (Atacama), Argentina, Bolivia. Solar evaporation concentrates lithium. Lower cost but slower ramp.
FORMS TRADED
Lithium Carbonate (Li₂CO₃): Battery grade (99.5%+) and technical grade. Used in LFP cathodes and glass/ceramics.
Lithium Hydroxide (LiOH): Battery grade monohydrate. Required for high-nickel NMC811 and NCA cathodes. Commands premium over carbonate.
Spodumene Concentrate (SC6): 6% Li₂O. Traded as ore from Australia to Chinese converters.
BATTERY CHEMISTRY LINK
LFP (Lithium Iron Phosphate): Uses lithium carbonate. Low cost, safe, long cycle life. BYD dominant. Growing for EVs and energy storage.
NMC 811 / NCA: Uses lithium hydroxide. Higher energy density. Tesla, Panasonic, CATL.
One EV battery pack typically contains 8–12kg of lithium (as LCE — Lithium Carbonate Equivalent).
KEY USES
EV and energy storage batteries (>70% of demand and growing rapidly)
Lubricating greases (lithium soap thickener)
Glass and ceramics (reduces thermal expansion)
Pharmaceuticals (lithium carbonate for bipolar disorder treatment)
Aluminium alloys
TRADE CORRIDORS
Major producers: Chile (SQM, Codelco — brine), Australia (Pilbara — spodumene), China (processor dominant), Argentina (growing)
Major buyers: China (80%+ of processing and battery manufacturing), South Korea, Japan (battery makers)
Tetra relevance: Australia and South America → China processing → South Korea/Japan battery supply chain.
PRICING BASIS
No LME contract. Spot prices assessed by Fastmarkets, Benchmark Mineral Intelligence, and CNEPS (Chinese platform). Extremely volatile — lithium carbonate price ranged from $6,000/MT (2020) to $80,000/MT (late 2022) and back to $10,000-15,000 (2024–2025).
MARKET STRUCTURE
China controls ~65% of global lithium processing and ~75% of battery cell manufacturing. This concentration creates supply chain risk for non-Chinese automakers and battery manufacturers.
SPECIFICATIONS (Battery Grade Lithium Carbonate)
Li₂CO₃: min 99.5%
Na: max 50 ppm
Mg: max 20 ppm
Ca: max 80 ppm
Fe: max 5 ppm
Moisture: max 0.5%