https://www.forbes.com/sites/timtreadgold/2021/07/02/lithium-price-tipped-to-rise-after-warning-of-perpetual-deficit/
Lithium Price Tipped To Rise After Warning Of “Perpetual Deficit”
If you’re investment portfolio is not exposed to lithium, a key metal in the batteries which power electric vehicles (EVs), then consider the price effect on a commodity said to be heading for a “perpetual deficit”.
That remarkable description of surging demand for lithium as EV sales accelerate incorporates the second price driver, a lack of supply response from the world’s major lithium miners.
Two investment banks this week upgraded their assessment of lithium in light of the increasing demand and sluggish supply growth with both upgrading their price forecasts for the metal.
Macquarie Bank was first to alert clients about how the lithium market is emerging faster than expected from a slowdown which started in 2018, triggering a 75% fall in the price of lithium hydroxide from $20,000 a ton to around $5000/t at this time last year.
Since that low point was reached, lithium has recovered to around $10,000/t but remains below what produces require to “incentivize” investment in restoring mothballed mines and processing plant or invest in new projects.
Macquarie said a fast-developing second market for lithium, stationary energy storage systems, had encourage it to make “material upgrades to forecast demand for lithium over the short and medium term”.
Credit Suisse echoed Macquarie’s buoyant lithium analysis advising clients earlier today that it would be “brave to resist lithium momentum”, adding that it was interesting to question whether lithium was a mining or technology investment.MORE FOR YOURichard Branson Plans To Get To Space Before Jeff Bezos“Lithium prices have risen sharply since February and we do not believe it is temporary,” Credit Suisse said.“Following production cuts (when the price crashed), the lithium supply glut has ended and the market is now tightening as the EV revolution accelerates", supported by the global commitment to decarbonization”.Credit Suisse said lithium demand might treble by 2025 from 2020 levels and supply would be stretched to meet that demand, but higher prices were needed to “provoke the required supply response”.
https://www.forbes.com/sites/timtreadgold/2021/07/02/lithium-pric...
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