ESS Weekly Report, page-127

• ELECTRIC POWER | METALS
• 22 Dec 2022 | 06:58 UTC

Commodities 2023: Lithium prices likely to see support from tight supply, bullish EV demand
Lithium prices will likely see strong support in 2023, with supply expected to remain tight amid bullish demand from the accelerating adoption of electric vehicles across the globe, though some price correction could be expected, led by a slowdown in the Chinese market, market participants told S&P Global Commodity Insights.

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With EV adoption picking up, some industry experts predict the gap between lithium demand and supply will remain or even widen in 2023.

Prices are expected to remain at current levels for the next few years, said John Walker, CEO of Alkemy Capital Investments' 100%-owned subsidiary Tees Valley Lithium, or TVL.

"While some normalization of current high spot prices is possible, on the contract side, we believe that the market will remain tight in 2023, with insufficient supply coming on stream," Vulcan Energy Resources CEO and Managing Director Francis Wedin said.

Chilean lithium producer SQM executives in a quarterly conference call Nov. 17 said it had ruled out locking in fixed lithium prices as it negotiates long-term supply contacts with consumers, confident that surging EV demand would keep the market tight. The company said it will continue to use indexed contracts to benchmark its prices, saying this was "the healthiest way to contract product."

Platts, part of S&P Global Commodity Insights, assessed seaborne lithium carbonate and lithium hydroxide at $75,000/mt CIF North Asia and $81,000/mt CIF North Asia Dec. 20, up 122% and 156%, respectively, since the start of 2022.



A survey of Asian market participants presented a more conservative view of lithium prices. More than half of the 26 companies expected Chinese lithium prices to average below Yuan 500,000/mt in 2023 and North Asian lithium prices to average below $70,000/mt, according to the latest Platts' Battery Metals Outlook Survey.

https://www.spglobal.com/commodityi...t-in-2023-from-tight-supply-bullish-ev-demand