I think it is safe to say that lithium experts can't agree on future prices and got it wrong.
This is from Joe Lowry (It is not clear what kind of price this is, China spot market or average contract price? I don't know.)
Articles — Global LithiumI think this is an honest assessment from someone who has worked in the industry for a long time.
Recently Daniel Jimenez was a guest on Joe Lowry's podcast. In mister Lowry asked mister Jimenez what is forecast for lithium production from the Atacama dessert in Chile would be in 2022. He said about 140K tons of LCE for SQM (125K announced) and 50 - 55K tons of LCE for Albermarle,190K - 200K tons of LCE for Chile in 2022. In regards to demand he said 500 - 520K tons of LCE in 2021, with less production and inventory drawdown within the supply chain and 630 - 650K tons of LCE demand in 2022, based on 9 million EV slaes. I think that is very conservative and lean more towards 10 to 11 million units. Deutsche Bank analyst Edison Yu and his team for example just announced that they think 5 million will be sold in China next year, up from 3.2 million this year. Ultimately, I think sales will depend on available battery raw materials, because in 2021 the inventories have been greatly recduced, so 2022 battery production will mostly depend on recent raw materials production.
Deutsche Bank expects BEV sales in China to reach 5 million units next year - CnEVPosthttps://podcasts.apple.com/us/podcast/the-global-lithium-podcast/id1483677267?i=1000544578396Today Fastmarkets posted this. Are they right to call the top in Q1 2022!? I don't know. Unfortunately, I couldn't find an 2021 outlook article from them to compare their forecasts with the actual numbers.
"We expect the lithium market to remain tight for the rest of 2021, because of price performance, stronger-than-expected demand growth and the slow return of idle production capacity. We expect additional supply to relieve the present tightness as 2022 unfolds.
For now, it appears as though the tightness will last well into the new year – the level of destocking by downstream processors, convertors, consumers and hoarders will determine whether prices hold at these levels, drift lower or push higher still.
Apparent demand is expected to be stronger than actual demand – the supply chain will likely want to restock after this expected period of destocking and expanding downstream capacity will need to carry ever larger amounts of working stock.
After a brief consolidation, the fact prices are on the rise again suggests consumers have decided they cannot afford to destock too much, with some prepared to chase prices higher in order to keep inventories topped up. However, given the already massive price gains in 2021, we expect consumers to be increasingly reluctant to chase prices higher and higher.
The question is how long it will take new material from expansions and restarts to be commercially available to the market. We should expect ramp-up issues and material will need to be qualified – a process that normally takes between 6-18 months depending on each company’s policy."
Energy transition metals price outlook 2022 - Fastmarkets
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