A bullish view on the future of the battery minerals sector from...

A bullish view on the future of the battery minerals sector from Canaccord’s Reg Spencer.

Speaking about how the battery metals market may react, he said Canaccord forecasts lithium will remain imbalanced until 2025 — when demand is estimated to go parabolic and uncertainty over where supply will come from will hit the market.

“We are currently experiencing this short-term imbalance in the market ahead of what we see as significant undersupply,” Spencer noted. “The longer these cycle lows persist, the greater risks they pose for the supply side to keep up with demand in the long term.”

According to his numbers, lithium projects miss their timelines by at least 18 months on average.

“When you remove significant supply from the market and poor market conditions prevent or impede projects getting financed, it only serves the effects of these delays taking a bit longer,” he said.

The expert explained that battery chemical projects are capital intensive, and in the case of lithium, on average it will cost US$15,000, or probably more, to bring on every tonne of new capacity.

“When we look at where lithium prices are trading today, we don’t have pricing that is at a sufficient level to incentivize investing in new capacity, and this is going to be a significant problem in the long term in our opinion,” said Spencer.


https://investingnews.com/daily/res...lithium-needs-long-term-demand/?mqsc=E4098423