# Lithium: Correlation Prices it moves with, and why Source page: https://www.materialinsights.org/commodities/lithium/correlation/ Lithium is mined from hard rock in Australia and from brines in Chile and Argentina, then refined, mostly in China, into carbonate or hydroxide. Electric vehicle and grid battery demand set the price, which has swung through boom and bust. No public price Lithium has no public monthly price series: Traded on futures and private assessments; no free long monthly series. #### What its price moves with Energy [LFP Lithium iron phosphate batteries](https://www.materialinsights.org/energy/e_li_lfp/)Main use LFP cells, now dominant in Chinese electric cars and grid storage, need lithium carbonate, so battery output is the main demand driver. When lithium crashed after its 2022 peak, LFP cell prices fell sharply too. Not enough overlapping price history to measure. Energy [EV Electric and hybrid vehicles](https://www.materialinsights.org/energy/e_evs/)Demand driver Electric cars carry large battery packs, so EV sales growth sets most of lithium's demand trend. Slower EV growth in Europe and the US, against overbuilt mine capacity, caused the slump that followed the 2022 peak. Not enough overlapping price history to measure. Energy [Na+ Sodium-ion batteries](https://www.materialinsights.org/energy/e_sodium_ion/)Substitute Sodium-ion batteries need no lithium and use cheap sodium-based materials, so they become attractive when lithium is expensive. A high lithium price speeds their adoption, which caps lithium's upside in stationary storage. Not enough overlapping price history to measure. Commodity [Sda Soda ash](https://www.materialinsights.org/commodities/soda_ash/)Processing input Lithium carbonate is precipitated from brine or leach solutions using soda ash, so refiners are steady buyers of it. Soda ash is a small part of lithium's cost and does not move its price. Not enough overlapping price history to measure. Chemical [CAM Battery cathode materials](https://www.materialinsights.org/chemicals/cathode_materials/)Product made Refined lithium carbonate and hydroxide are reacted with iron phosphate or with nickel, manganese and cobalt to make cathode materials, whose prices are usually set by formula off lithium plus a processing fee. No public price for battery cathode materials, so the link is explained in words only. Chemical [H2SO4 Sulphuric acid](https://www.materialinsights.org/chemicals/sulphuric_acid/)Processing input Spodumene concentrate from hard-rock mines is roasted and leached with sulphuric acid to extract lithium, so refiners in China use large volumes of acid. It is a moderate cost compared with the concentrate itself. Not enough overlapping price history to measure. How to read these numbers **Correlation of monthly changes** (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak. **12-month changes** compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs. **Price function** is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)^β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation. **Lead or lag** checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months. Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link. Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site. ## Other sections - [Summary](https://www.materialinsights.org/commodities/lithium/index.md) - [Overview](https://www.materialinsights.org/commodities/lithium/overview/index.md) - [Extraction](https://www.materialinsights.org/commodities/lithium/extraction/index.md) - [Production](https://www.materialinsights.org/commodities/lithium/production/index.md) - [Stocks](https://www.materialinsights.org/commodities/lithium/stocks/index.md) - [Cycles](https://www.materialinsights.org/commodities/lithium/cycles/index.md) - [Trading](https://www.materialinsights.org/commodities/lithium/trading/index.md) - [Movement](https://www.materialinsights.org/commodities/lithium/movement/index.md) - [Criticality](https://www.materialinsights.org/commodities/lithium/criticality/index.md) - [Characteristics](https://www.materialinsights.org/commodities/lithium/characteristics/index.md) - [Emissions](https://www.materialinsights.org/commodities/lithium/emissions/index.md) - [Relationships](https://www.materialinsights.org/commodities/lithium/links/index.md)