That's all very anecdotal.
Let's look at demand numbers.
According to the IEA
[link],
330GWh deployed in 2021
550GWh in 2022 (65% growth)
and in 2023, it looks like about 825GWh (over 50% growth) (according to Adamas Intel)
View attachment 5767216So around 50% YOY over 2022. This is a more accurate measure than looking at EV sales growth (which is still high) because it directly links to chemical demand (carbonate/hydroxide and SC6 needed). Additionally, pure EV sales growth numbers miss the fact that battery sizes have increased 10% YOY on average over 2022. Anyhow, 50% growth is EV batteries deployed is very strong demand contrary to the media claims.
The sleeper in this demand discussion is ESS however.
View attachment 5767213We have over 150% YOY growth in energy deployed in static storage (according to Rho Motion), which could equate to 100GWh in 2023. Starting from a smaller base than EVs, it still represents about 10% of the chemicals needed compared to EVs. However, that 150% YOY growth rate (which couples directly to the explosion in PV solar panels deployment growth) is huge. If ESS got 150% YOY growth in 2024, we would see that 100GWh turn into 250GWh which would be 30% of 2023 EV sales. Most analysists underestimate the ESS component. Something to watch closely.
So why are we seeing collapsing prices?!
Disclaimer all IMO!
This volatility will continue but the most recent episode of undersupply saw panic Chinese buying/stocking which pushed prices up to $80/kg and at those levels, allowed all kinds of high-cost curve supply to come online. As Rick Rule famously stated, 'the cure to high prices is high prices' and soon 1% African DSO, Chinese low grade lepidolite etc came onto the market, in addition to traditional mine expansions overwhelming CURRENT demand (which had a component of destocking also).
Now prices have moderated and continue to drop. This will have a few effects, i) high-cost curve production will be reduced and, ii) investments in new mines and expansion will become more difficult and delayed. With continued strong EV and ESS demand, we should see an inverse of Rick's statement leading to another round of increasing prices in these well-known commodity cycles.
(20min delay)