Lithium producers bullish on long-term demand despite recent...

Lithium producers bullish on long-term demand despite recent price drop

28 06 2024 09:54am AEST

By Ernest Scheyder
LAS VEGAS, June 27 (Reuters) - The world's largestlithium producers told a major industry conference this weekthey remain bullish on long-term demand for the electric vehiclebattery metal despite the recent price plunge that has forcedlayoffs and curtailed expansions.
Once a niche metal used primarily in ceramics andpharmaceuticals, lithium demand has grown rapidly over the pastdecade. But oversupply from China and a softening of aggressiveEV adoption rates has dragged lithium prices down more than 80%in the last year.
The mood at the Fastmarkets Lithium Supply and Battery RawMaterials Conference in Las Vegas, the world's largest,reflected a cautious hope among attendees that the industry canmeet an expected demand jump later this decade as EVs andbattery storage technologies grow more popular.
The conference had roughly 1,100 attendees, in line withlast year and nearly triple 2019 levels, organizers said.
"We're really focused on the fundamentals of the underlyingbusiness," said Patrick Howarth, head of Exxon's lithiumdivision, which announced at the conference it would expand itslithium production plans in Arkansas. "We're not scared off bylow prices, and we're not drawn in by high prices."
Fastmarkets data show, for example, that U.S. demand forlithium will increase 29% each year through 2030, with jumpsalso expected throughout the rest of the world.
"Critical minerals are the oil and gas of our energyfuture," Ashley Zumwalt-Forbes, the U.S. Energy Department'sdeputy director for batteries and critical materials, told theconference.
Zumwalt-Forbes oversees a U.S. government grant program forthe critical minerals supply chain and said she was eager tohave more lithium companies apply for funding.
The demand projections helped offset the somber mood thathas permeated the industry in recent months after layoffs fromLake Resources , Albemarle and others.
"For those of us that are worried about the marketsentiments at this moment in time, keep your eye on thelong-term trajectory," said Dale Henderson, CEO of Australianlithium miner Pilbara Minerals .
Global lithium mine supply was more than 1 million metrictons last year, a figure expected to more than double by 2026largely due to expansions in Africa, China and Australia,according to Fastmarkets data. Yet producers warned that unlessprices rise, that supply is unlikely to be available.
"We're going to be measured and judged in how we react toprices and supply the market," said Sarah Maryssael, chiefstrategy officer for Arcadium Lithium , which hasdevelopment projects across the globe.
Albemarle, the world's largest lithium producer, started theconference with a stark warning about "concerning" lithiumprices, but then mapped out a plan to auction off supplies ofits metals to the highest bidder and struck a hopeful tone ondemand later this decade.
"I'm not worried about demand," said Eric Norris, head ofAlbemarle's energy storage business. "Ideally it'd be in theU.S. But if it's not in the U.S., no doubt there'll be demandelsewhere."
(Reporting by Ernest Scheyder; Editing by Jamie Freed)
(([email protected]; Twitter: @ErnestScheyder;+1-713-210-8512; Reuters Messaging:[email protected]))