IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v45y2015icp92-97.html
   My bibliography  Save this article

Transparent and opaque pricing: The interesting case of lithium

Author

Listed:
  • Maxwell, Philip

Abstract

Appreciating the pricing arrangements for a mineral and its compounds provides useful insight into the nature of its market and the industrial structure of its production. This paper focuses on the case of lithium, which has emerged from being a minor metal with limited profitable applications in 1950 to its glamour metal status some 65 years later. During this period bilateral contracts based on producer prices have been the major way in which prices have been negotiated. The entry of a major new producer (SQM) in the late 1990s led to a situation where price information was difficult to obtain, even though competition in the sector was growing. This is consistent with a movement from cooperative oligopoly to non-cooperative oligopoly. Growing price transparency since 2010 has been associated with the actual and projected entry of several new producers. With its continuing growth it seems inevitable that lithium will be formally traded on one of major metal exchanges within the next decade. In addition to this, the practice of transfer pricing between branches of established multinational producers also applies to the lithium industry.

Suggested Citation

  • Maxwell, Philip, 2015. "Transparent and opaque pricing: The interesting case of lithium," Resources Policy, Elsevier, vol. 45(C), pages 92-97.
    • Handle: RePEc:eee:jrpoli:v:45:y:2015:i:c:p:92-97
    DOI: 10.1016/j.resourpol.2015.03.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030142071500032X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2015.03.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yaksic, Andrés & Tilton, John E., 2009. "Using the cumulative availability curve to assess the threat of mineral depletion: The case of lithium," Resources Policy, Elsevier, vol. 34(4), pages 185-194, December.
    2. Radetzki, Marian, 2013. "The relentless progress of commodity exchanges in the establishment of primary commodity prices," Resources Policy, Elsevier, vol. 38(3), pages 266-277.
    3. Ebensperger, Arlene & Maxwell, Philip & Moscoso, Christian, 2005. "The lithium industry: Its recent evolution and future prospects," Resources Policy, Elsevier, vol. 30(3), pages 218-231, September.
    4. Radetzki,Marian, 2008. "A Handbook of Primary Commodities in the Global Economy," Cambridge Books, Cambridge University Press, number 9780521880206, Junio.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Macarena Montané & Gustavo Cáceres & Mauricio Villena & Raúl O’Ryan, 2017. "Techno-Economic Forecasts of Lithium Nitrates for Thermal Storage Systems," Sustainability, MDPI, vol. 9(5), pages 1-15, May.
    2. Cagli, Efe Caglar, 2023. "The volatility spillover between battery metals and future mobility stocks: Evidence from the time-varying frequency connectedness approach," Resources Policy, Elsevier, vol. 86(PA).
    3. Tian, Xu & Geng, Yong & Sarkis, Joseph & Gao, Cuixia & Sun, Xin & Micic, Tatyana & Hao, Han & Wang, Xin, 2021. "Features of critical resource trade networks of lithium-ion batteries," Resources Policy, Elsevier, vol. 73(C).
    4. Sterba, Jiri & Krzemień, Alicja & Riesgo Fernández, Pedro & Escanciano García-Miranda, Carmen & Fidalgo Valverde, Gregorio, 2019. "Lithium mining: Accelerating the transition to sustainable energy," Resources Policy, Elsevier, vol. 62(C), pages 416-426.
    5. Wang, Xiao-Qing & Qin, Meng & Moldovan, Nicoleta-Claudia & Su, Chi-Wei, 2023. "Bubble behaviors in lithium price and the contagion effect: An industry chain perspective," Resources Policy, Elsevier, vol. 83(C).
    6. Fizaine, Florian, 2018. "Toward generalization of futures contracts for raw materials: A probabilistic answer applied to metal markets," Resources Policy, Elsevier, vol. 59(C), pages 379-388.
    7. Philip Maxwell & Mauricio Mora, 2020. "Lithium and Chile: looking back and looking forward," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 57-71, July.
    8. Zhang, Xiaojing & Chang, Hsu-Ling & Su, Chi-Wei & Qin, Meng & Umar, Muhammad, 2024. "Exploring the dynamic interaction between geopolitical risks and lithium prices: A time-varying analysis," Resources Policy, Elsevier, vol. 90(C).
    9. Shigetomi, Yosuke & Nansai, Keisuke & Kagawa, Shigemi & Kondo, Yasushi & Tohno, Susumu, 2017. "Economic and social determinants of global physical flows of critical metals," Resources Policy, Elsevier, vol. 52(C), pages 107-113.
    10. Fizaine, Florian, 2015. "Minor metals and organized markets: News highlights about the consequences of establishing a futures market in a thin market with a dual trading price system," Resources Policy, Elsevier, vol. 46(P2), pages 59-70.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philip Maxwell & Mauricio Mora, 2020. "Lithium and Chile: looking back and looking forward," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 57-71, July.
    2. Fernando Moreno-Brieva & Carlos Merino, 2020. "African international trade in the global value chain of lithium batteries," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 25(6), pages 1031-1052, August.
    3. Kushnir, Duncan & Sandén, Björn A., 2012. "The time dimension and lithium resource constraints for electric vehicles," Resources Policy, Elsevier, vol. 37(1), pages 93-103.
    4. Ziemann, Saskia & Weil, Marcel & Schebek, Liselotte, 2012. "Tracing the fate of lithium––The development of a material flow model," Resources, Conservation & Recycling, Elsevier, vol. 63(C), pages 26-34.
    5. Juan Ignacio Guzmán & Enrique Silva, 2018. "Copper price determination: fundamentals versus non-fundamentals," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 31(3), pages 283-300, October.
    6. Miedema, Jan H. & Moll, Henri C., 2013. "Lithium availability in the EU27 for battery-driven vehicles: The impact of recycling and substitution on the confrontation between supply and demand until2050," Resources Policy, Elsevier, vol. 38(2), pages 204-211.
    7. Jean-François Labbé & Georges Daw, 2012. "Lithium: An Overview [Panorama 2011 du marché du lithium]," Working Papers halshs-00809298, HAL.
    8. Grosjean, Camille & Miranda, Pamela Herrera & Perrin, Marion & Poggi, Philippe, 2012. "Assessment of world lithium resources and consequences of their geographic distribution on the expected development of the electric vehicle industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(3), pages 1735-1744.
    9. Jean-François Labbé & Georges Daw, 2012. "Lithium: An Overview [Panorama 2011 du marché du lithium]," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00809298, HAL.
    10. Jacks, David S. & Stuermer, Martin, 2020. "What drives commodity price booms and busts?," Energy Economics, Elsevier, vol. 85(C).
    11. Hache, Emmanuel & Seck, Gondia Sokhna & Simoen, Marine & Bonnet, Clément & Carcanague, Samuel, 2019. "Critical raw materials and transportation sector electrification: A detailed bottom-up analysis in world transport," Applied Energy, Elsevier, vol. 240(C), pages 6-25.
    12. Kleijn, René & van der Voet, Ester & Kramer, Gert Jan & van Oers, Lauran & van der Giesen, Coen, 2011. "Metal requirements of low-carbon power generation," Energy, Elsevier, vol. 36(9), pages 5640-5648.
    13. Karan Bhuwalka & Randolph E. Kirchain & Elsa A. Olivetti & Richard Roth, 2023. "Quantifying the drivers of long‐term prices in materials supply chains," Journal of Industrial Ecology, Yale University, vol. 27(1), pages 141-154, February.
    14. Radetzki, Marian, 2013. "The relentless progress of commodity exchanges in the establishment of primary commodity prices," Resources Policy, Elsevier, vol. 38(3), pages 266-277.
    15. Leonidas Milios, 2021. "Towards a Circular Economy Taxation Framework: Expectations and Challenges of Implementation," Circular Economy and Sustainability, Springer, vol. 1(2), pages 477-498, September.
    16. Richa, Kirti & Babbitt, Callie W. & Gaustad, Gabrielle & Wang, Xue, 2014. "A future perspective on lithium-ion battery waste flows from electric vehicles," Resources, Conservation & Recycling, Elsevier, vol. 83(C), pages 63-76.
    17. Roche, Julian Spencer, 2020. "Success criteria for commodity exchanges," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 15(2), June.
    18. Gil-Alana, Luis A. & Monge, Manuel, 2019. "Lithium: Production and estimated consumption. Evidence of persistence," Resources Policy, Elsevier, vol. 60(C), pages 198-202.
    19. Gauvin, Ludovic & Rebillard, Cyril, 2013. "Towards Recoupling? Assessing the Impact of a Chinese Hard Landing on Commodity Exporters: Results from Conditional Forecast in a GVAR Model," MPRA Paper 65457, University Library of Munich, Germany.
    20. David S. Jacks & Kevin H. O'Rourke & Jeffrey G. Williamson, 2011. "Commodity Price Volatility and World Market Integration since 1700," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 800-813, August.

    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:45:y:2015:i:c:p:92-97. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.