In its latest industry report, market analyst Fitch Solutions revised up significantly both its lithium carbonate and hydroxide price forecasts from 2021 to 2026, to incorporate higher global EV sales assumptions from its Autos team and subsequent stronger lithium demand for batteries.
Fitch forecasts the global lithium market to tighten further next year, as the analyst sees the global surplus shrinking. On the demand side, the analyst notes momentum behind the decarbonization story remains very robust, which will keep the EV sector buoyant in the coming quarters.
The Autos team has revised up its EV sales assumptions in recent months and forecasts EV sales growth to decelerate in 2022 following the sharp recovery in demand recorded in 2021, but still see sales expanding by a very robust 40% y-o-y next year, at a stronger rate than pre-covid-19. Absolute growth in new EV sales will also be in line with 2021 numbers (+2.2mn cars each year).
On the supply side, Fitch forecasts global production of lithium carbonate equivalent (LCE) to rise by 18.0% in 2022, continuing on the recovery in output initiated in 2021. Global production declined in 2019 and 2020 amidst low prices. Fitch sees carbonate prices averaging $18,050/tonne in 2021 ($13,450/tonne previously), and averaging $21,000/tonne in 2022, up 16.3% y-o-y ($15,025/tonne previously) and $19,000/tonne in 2023, down 9.5% y-o-y ($15,400/tonne previously).
Demand growth will continue to outstrip supply expansion, which will tighten further the global balance, Fitch forecasts.
Fitch forecasts the global lithium market to tighten further next year, as the analyst sees the global surplus shrinking. On the demand side, the analyst notes momentum behind the decarbonization story remains very robust, which will keep the EV sector buoyant in the coming quarters.
The Autos team has revised up its EV sales assumptions in recent months and forecasts EV sales growth to decelerate in 2022 following the sharp recovery in demand recorded in 2021, but still see sales expanding by a very robust 40% y-o-y next year, at a stronger rate than pre-covid-19. Absolute growth in new EV sales will also be in line with 2021 numbers (+2.2mn cars each year).
On the supply side, Fitch forecasts global production of lithium carbonate equivalent (LCE) to rise by 18.0% in 2022, continuing on the recovery in output initiated in 2021. Global production declined in 2019 and 2020 amidst low prices. Fitch sees carbonate prices averaging $18,050/tonne in 2021 ($13,450/tonne previously), and averaging $21,000/tonne in 2022, up 16.3% y-o-y ($15,025/tonne previously) and $19,000/tonne in 2023, down 9.5% y-o-y ($15,400/tonne previously).
Demand growth will continue to outstrip supply expansion, which will tighten further the global balance, Fitch forecasts.
