Lithium supplies are stretched, and customers are feeling the pressure. Andy Home reports in Reuters:
The world has been running short of lithium this year, a surge of new supply failing to catch up with a still faster demand wave as the electric vehicle (EV) revolution accelerates.
Lithium’s price narrative is fiercely contested territory, but the clearest signal of market shortfall is price. From spodumene ore through lithium carbonate to lithium hydroxide, prices have more than doubled again this year after an explosive rally in 2021.
Last month’s average spot Asian price for battery-grade carbonate was assessed by Fastmarkets at $80,800 per tonne, a rise of over 1,000% since the start of last year.
Even Goldman Sachs, which outraged lithium bulls with a bearish market call in May, now thinks global supply will fall 84,000 tonnes short of demand this year. (“Lithium’s delayed decline”, Nov. 9, 2022)
True, the remarkable bull run has shown signs of losing momentum in recent weeks, but lithium is still holding close to the peaks even as other industrial metals prices retreat on fears of recession.
What happens next? There is a broad analyst consensus that prices should ease over the course of 2023, but lithium’s supply-chain dynamics are evolving so fast there is elevated uncertainty around any forecast.
Read more here.