Why have lithium, nickel and cobalt markets slumped despite the demand for electric vehicles?

The markets haven’t slumped at all. Volumes used and traded have risen substantially - because of electric vehicles.

Prices have slumped but that’s because we have a rational economic system.

It’s entirely true that demand for those varied metals has risen. So, ideally, we’d like a system that increased supply to meet that higher demand. As it happens we use an economic system that has increased supply by more than demand has increased. Therefore prices have fallen.

Ain’t that great?

Now, the details here. As we said yesterday in fact. There is no shortage - not at any likely level of demand for thousands of years - of the materials themselves. There could, conceivably, be a shortage at any one time of people digging holes to get them.

So, we’ve a system that gets people digging more holes. Capitalism means that those who own the organisation that digs the right extra hole get to enjoy hot and cold running LearJets and other necessary Big Boy Toys for the rest of their lives. Free markets mean that anyone who wants to try for that reward is free to do so. Prices provide the information for everyone as they consider whether to do so.

Thus a capitalist, free market, price driven mining and minerals system will have supply rising when demand does - thereby moderating prices again. It’s a great system and one that requires exactly no politics nor bureaucracy.

And here’s what’s really amazing about it. It works for near everything! How cool is that?

Someone should write a book about it.