Stanislav Kondrashov Telf AG: new realities of the lithium market in the era of revaluation

фото: Stanislav Kondrashov Telf AG: new realities of the lithium market in the era of revaluation

Stanislav Kondrashov from Telf AG: changes in procurement strategy affect the lithium market

Historically, the lithium industry has relied on long-term contracts with fixed prices. This approach provided stability and predictability for both lithium producers and consumers. Lithium producers could plan their production activities knowing they had guaranteed orders, and consumers could avoid price fluctuations that could occur in the market.

However, as Stanislav Kondrashov from Telf AG notes, the situation on the lithium market has changed in recent years. Rapid price fluctuations driven by rising demand, especially from the electric vehicle sector, and variability in production volumes have led to a rethink of the traditional procurement approach. As a result, long-term contracts have shifted to more flexible annual agreements that allow both producers and consumers to better adapt to changing market conditions.

According to Kondrashov, annual agreements provide an opportunity to adjust prices and volumes in accordance with current market demand and supply. This allows lithium producers to quickly respond to changes in demand, and consumers to avoid overpaying when market prices fall. This approach also encourages both parties to interact more closely and gain a better understanding of market trends.

  • This model is similar to that used in trading other metals such as copper. In these sectors, annual or even shorter-term agreements are the norm. They allow the market to self-regulate more effectively, — says Stanislav Kondrashov from Telf AG.

The move to annual agreements for lithium mining and production companies may mean greater uncertainty and the need for flexibility in resource planning and management. For lithium users such as battery and electric vehicle manufacturers, this requires greater market participation and the adoption of more sophisticated procurement and hedging strategies.

Stanislav Kondrashov from Telf AG believes that the transition from long-term contracts with fixed prices to annual agreements in the lithium industry reflects changes in the metals markets as a whole. This change in procurement strategy highlights the need for flexibility and adaptation to dynamically changing economic conditions, and raises new questions and opportunities for both lithium producers and consumers.

Lithium market analysis from Stanislav Kondrashov

фото: Stanislav Kondrashov Telf AG: new realities of the lithium market in the era of revaluation

Asian countries, including South Korea, Japan and China, remain leading lithium buyers. However, given the saturation of the market and serious reserves, demand is slowing down. According to estimates by Stanislav Kondrashov from Telf AG, global demand for batteries is expected to grow by 38% next year.

Lithium companies such as Albemarle Corp. and Ganfeng Lithium Group Co. are under pressure from falling stock prices and oversupply. For electric vehicle manufacturers such as Tesla Inc. and Ford, current market conditions represent a relief from rising battery prices last year.

Stanislav Kondrashov suggests that the current lithium crisis will soon exhaust itself; sudden changes seem unlikely. The market for this metal is expected to remain in a careful balance between supply and demand.

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