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Lithium looks brighter

A Tianqi Lithium spokesperson told S&P Global Platts that the market's understanding of lithium resources was being reshaped.

"Due to its strategic significance, lithium resources will be more difficult to obtain and control. Therefore, lithium resources will become a key factor restricting the development of the industry in the medium- and long-term," the spokesperson said.

The spokesperson also attributed rising prices to some lithium-ion battery manufacturers' accelerated capacity expansion and increasing downstream cathode material orders.

An Albemarle spokesperson told Platts the market would "remain tight in 2022 as new industry supply comes close to keeping up with expected demand."

The company saw in excess of 30% growth in lithium demand through 2025, largely due to high EV production and sales, but also due to larger battery sizes, the Albemarle spokesperson added.

According to Platts Analytics, global plug-in light-duty EV sales are expected to rise to 6.5 million units in 2022 and 10.5 million units in 2025, up from an estimated 6 million units in 2021 and 3.1 million units in 2020.

To meet growing demand, several producers are planning to expand capacity, although most of the additional volumes are expected to be available earliest H2 2022, sources said.

"We heard from suppliers H1 will remain very tight, then it should be a bit better in H2," said a consumer source, who believed prices would keep climbing until peaking around the mid-$30,000s/mt by the end of H1.

"In H2, new supply can bring some relief to the market and maybe we will start to see some price correction," the source added.