INDUSTRY BULLETIN: Lithium Prices Soar in China as Demand Grows including here in Canada

February 4, 2021

A recent report from Benchmark Mineral Intelligence shows that lithium prices are soaring in China on the back of heavy demand for lithium iron phosphate (LFP) batteries. Policy incentives in China to subsidize shorter-range vehicles, public transport fleet electrification and 5G power stations are assisting in driving this domestic lithium battery demand.

Benchmark’s battery grade lithium carbonate midpoint price in January surged by over 40% compared to January 2020 to ~US$9,450 a tonne - the highest level seen since June 2019. Meanwhile, Asian battery grade lithium carbonate spot prices continue to be driven by tight spot supply and surging domestic China prices; and the European and US lithium hydroxide price rallied by 7.5%.

Benchmark notes, “Although this surging price trend has largely been confined to lithium carbonate within China, this has had a knock-on effect elsewhere, drawing up lithium carbonate prices out of South America by 10%, and 6% for spodumene feedstock in Australia.” Spodumene concentrate prices have reportedly moved up even more in China, to around US$700/tonne.

Demand for lithium batteries is also growing in Canada, with a number of recent announcements from electric vehicle manufacturers here. 2021 appears to be another year of growth for the EV market.

  • On January 15, 2021, GM Canada announced a tentative $1 billion deal to transform its CAMI plant in Ingersoll, Ontario, to make commercial electric vehicles. GM Canada plans to build BrightDrop EV 600s: fully electric vans with 250 miles of range, fast recharge times and a big initial order from FedEx.
  • On February 3, 2021, New Flyer Industries of Winnipeg, Manitoba announced that it is about to finalize its largest order for battery-electric buses to the Seattle-area transit agency, signalling broader market readiness for zero-emission buses. King Country Metro has agreed to purchase 40 sixty-foot zero-emission, battery-electric Xcelsior heavy-duty transit buses from New Flyer. It plans to order an additional 80 battery-electric buses in the coming year.
  • Autobus Séguin has ordered 60 LionC electric buses for use in Quebec. The zero-emission vehicles will be provided over a five year period and is the single largest order in the electric school bus industry.
  • Electrovaya is supplying batteries for Raymond Corp., which manufactures and operates EV forklifts in Home Depots and Walmarts across North America.

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About Avalon Advanced Materials Inc. (AVL:TSX)

Avalon Advanced Materials Inc. is a Canadian mineral development company specializing in sustainably-produced materials for clean technology. The Company now has four advanced stage projects, providing investors with exposure to lithium, tin and indium, as well as rare earth elements, tantalum, cesium and zirconium. Avalon is currently focusing on developing its Separation Rapids Lithium Project near Kenora, Ontario while looking at several new project opportunities, including re-activating its 100%-owned Lilypad Tantalum-Cesium Project in northwestern Ontario. Social responsibility and environmental stewardship are corporate cornerstones.