Thanks Thesi, good read.
I believe that these comments:
"BMI had forecast supply at 572,000 tonnes for 2023, but now sees that number at 543,000 tonnes, with a shortfall of 8,000 tonnes. The company believes the deficit in later years to grow significantly.
For this year, BMI sees global lithium output reaching 324,000 tonnes, with demand for the metals slightly lower, at 315,000 tonnes."
Align with the chart that i posted the other day:
(note I added the red points to illustrate what effect an increase in demand of about 1m EVs pa would have)
If we look at this closely, we can see that all it takes is extra demand (above current estimates) of about 200k EVs per year (equating to about 20ktpa LCE) to tip that surplus into shortfall even sooner.
That is nothing! It means that all it takes is about an extra 0.3% of new car buyers to choose EVs instead of ICE, and job done. 0.3%!
Here are some more comments to add regarding EV numbers and market penetration, that are certainly relevant to this point of supply/demand balance and price recovery:
(from https://www.schmidtmatthias.de/post/european-electric-car-sales-april-2020 )
That market outlook doesn't sound too unreasonable to me - the total market dropping by 20% for the year, with EV penetration averaging about 5%.
It would be very interesting to know what EV volumes BMI have forecast for their "Lithium market balance" chart above...? I have shown how it is extremely sensitive to EV demand numbers, something which we have seen rapidly rise in Europe in Q1 and surely will continue when the virus drama subsides...?
I'm suspecting that BMI will further adjust their market balance outlook (bringing the shortfall crossover point sooner again) as the market evolves in the next 3-6 months, as I'm confident we will see higher EV demand than previously estimated. Lots of new incentives/support/etc coming out of this latest mess, all helping to ultimately speed the transition. Imo that growth in Q1 in Europe is a sign of things to come. We'll see.
Cheers
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