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“Garim peiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stoc khead readers.
Will battery energy storage systems bring forward the day when the lithium market flips from over to undersupply, putting a rocket under lithium prices and ASX lithium stocks in the process?
It could well be the case, with the previously under-appreciated demand growth from BESS [Battery Energy Storage System] known to be a key reason behind Rio Tinto’s (ASX:RIO) dive in to the lithium space, as the renewable energy sector gets both bigger and smarter.Its $10bn acquisition of Arcadium was classic straw hats in winter stuff by Rio, given the beaten-up lithium prices at the time, which are still to find a bottom.
But if it’s right about BESS, Rio’s move into lithium may well prove to have been sweetly timed.BESS is the new high growth driver for lithium battery demand. It wasn’t that long ago that a new solar or wind farm would be built without battery storage. Now utility-scale systems sit alongside renewable energy sources to improve efficiency, providing grid stability benefits as well.BESS demand is not as big as the electric vehicle sector, but its growth rate in 2024 was a phenomenal 51%.
Demand growth from the EV sector was a none too shabby 26% off a higher base.High demand growth rates from EVs and BESS have continued in 2025.
Combine the two and the question of when lithium demand again outstrips supply comes into sharp focus.
Some forecasters suggest a supply deficit could emerge by the end of next year.It was a supply deficit that drove lithium prices to a crazy $US80,000/t ($US6,000/t for concentrates of the intermediate raw material spodumene) in late 2022. Prices are now back at $US8400/t and $US620/t respectively.