New study claims lithium demand could soar more than 1,500% by 2050

By Colin Hay - May 9, 2024

While lithium prices are currently down from where they were in 2022, a number of experts are forecasting dramatic increases in demand for this critical battery metal.

Using data obtained from the International Energy Agency (IEA), the UN Trade & Development (UNCTAD) projects that lithium demand could rise by more than 1,500% between now and 2050.

UNCTAD says to achieve global 2030 net-zero emission targets, the lithium mining industry will need 70 new mines.

Elsewhere, Statista is forecasting global demand for lithium in 2030 to surpass 2.4 million metric tons of lithium carbonate equivalent (LCE), doubling the demand forecast for 2025.

Leading this surge will be increases in battery use for electric vehicles (EVs), with demand expected to reach 3.8Mt by 2035.

Dynamic market

Shanghai Metals Markets is also bullish.

Their new report “Key Trends in Lithium Prices: A Comprehensive Analysis” says the metal is expected to see a surge in demand, also projecting over 2.4Mt of LCE by 2030.

Shanghai Metals Markets also pointed to technological advancements in battery production and the growing role of batteries in renewable energy as key factors influencing the lithium market.

It noted that the Australian lithium market, influenced by Chinese supply chains and the IEA’s forecast for battery demand growth, highlight the market’s dynamic nature.

“Future lithium demand is anticipated to increase, driven by EV battery demand, with a potential reach of 3.8Mt by 2035,” the report said.

“Investment opportunities in lithium stocks, particularly ASX lithium stocks, are promising.”

“Experts predict a lithium price recovery, averaging around $45,000 per metric ton from 2023 to 2030, aligning with the expected demand surge.”

Chinese influence

Shanghai Metals Markets noted that the Australian lithium market holds strategic importance due to its significant reserves and production capacity.

It said that with China’s substantial influence on global lithium supply chains, the evolving dynamics between these two entities have a direct impact on the current lithium market landscape.

EV sales in China surged during 2023 with penetration in China’s passenger vehicle market rising by 9.5% over the year to reach 35%.

Wood Mackenzie estimates that EV penetration in the global passenger vehicle market rose from 4.5% in 2020 to 18% in 2023.

Local production

The office of Australia’s Chief Economist recently reported that global lithium demand is expected to more than double between 2023 and 2029, driven by the rising adoption of EVs.

The Federal Department of Industry, Science and Resources’ latest “Resources and Energy Quarterly” forecast Australian production to rise despite cutbacks at some mines.

It noted that lithium spodumene prices remain higher than the cash cost — a measure of the marginal cost of production — at most major Australian lithium mines.

It also found that high prices over 2022 and 2023 left most lithium miners with a high level of cash reserves, reducing the risk of any forced mine closures.