• RankiaPro Europe
    • RankiaPro Spain
    • RankiaPro LATAM
    • RankiaPro Italy
SUBSCRIBE
Search
Close
  • Home
  • Insights
    EQUITIES
    EQUITIES
    FIXED INCOME
    FIXED INCOME
    ESG
    ESG
    INTERVIEWS
    INTERVIEWS
    MARKET OUTLOOK
    MARKET OUTLOOK
    ETF
    ETF

    Featured

    Cover-Silicon-Valley-Bank-bankruptcy
    Insights

    Silicon Valley Bank bankruptcy: the market reactions

  • News
    APPOINTMENTS
    APPOINTMENTS
    LAUNCHES
    LAUNCHES
    ASSET MANAGERS
    ASSET MANAGERS

    FEATURED

    cover-naim-abou-jaoude-ceo-candriam
    Asset Managers

    Candriam to acquire majority shareholding in Tristan Capital Partners: a leading european real estate manager

  • Magazine
  • Events
    RANKIA FUNDS EXPERIENCE
    EVENTS & CONFERENCE CALLS
    EVENTS & CONFERENCE CALLS
    RANKIAPRO MEETINGS
    RANKIAPRO MEETINGS
  • Podcast
  • MiFIDII Training
Menu
  • Home
  • Insights
    EQUITIES
    EQUITIES
    FIXED INCOME
    FIXED INCOME
    ESG
    ESG
    INTERVIEWS
    INTERVIEWS
    MARKET OUTLOOK
    MARKET OUTLOOK
    ETF
    ETF

    Featured

    Cover-Silicon-Valley-Bank-bankruptcy
    Insights

    Silicon Valley Bank bankruptcy: the market reactions

  • News
    APPOINTMENTS
    APPOINTMENTS
    LAUNCHES
    LAUNCHES
    ASSET MANAGERS
    ASSET MANAGERS

    FEATURED

    cover-naim-abou-jaoude-ceo-candriam
    Asset Managers

    Candriam to acquire majority shareholding in Tristan Capital Partners: a leading european real estate manager

  • Magazine
  • Events
    RANKIA FUNDS EXPERIENCE
    EVENTS & CONFERENCE CALLS
    EVENTS & CONFERENCE CALLS
    RANKIAPRO MEETINGS
    RANKIAPRO MEETINGS
  • Podcast
  • MiFIDII Training
Search
Close
Search
Close

Home | Lithium market update: elevated prices are creating favourable dynamics for miners

Lithium market update: elevated prices are creating favourable dynamics for miners

Annual lithium demand is projected to reach roughly 1.5 million metric tons of lithium carbonate equivalent by 2025 and over 3 million tons by 2030.
Global X Team

Global X Team

2022/12/15

Alec Lucas, research analyst at Global X ETFs

In October 2022, prices for battery grade lithium carbonate in China hit an all-time high of $74,475 per tonne, eclipsing the record set just a month prior. Lithium pricing trends are deeply rooted in the transportation segment’s ongoing shift toward electrification. In recent years, accommodative government policy, declining costs, consumer preference, and technological improvement have supported rapidly increasing adoption of electric vehicles (EVs). So far lithium supply upgrades have not kept pace with this surge in demand. As a result, we expect the lithium market balance to tilt toward a supply deficit for several years, presenting opportunities for the mining companies that dictate supply.

Lithium prices have surged 123% year-to-date and are up as much as 10x versus historical levels, according to the Benchmark Minerals Intelligence lithium price index. As momentum accelerated toward EVs in recent years, so too did aggregate demand for lithium. On average, the lithium-ion battery packs found in EVs contain about 9kg of lithium, thousands of times more than most consumer electronics. Global EV sales doubled from 3.3 million units to 6.6 million units between 2020 and 2021 and are expected to increase by another 52% in 2022.

Meanwhile, lithium miners have been unable to scale supply as rapidly. Depending on the method of extraction, bringing new capacity online can take 3–5 years or more. This time is needed to conduct studies, secure permitting, raise capital, and deploy capital before any lithium is produced. As such, it is challenging for miners to react quickly to rising demand without considerable pre-emptive efforts.

Historically, miners have also been hesitant to boost production, fearing what flooding the market with supply could do to lithium prices. This scenario occurred between 2015 and 2018 when miners hiked lithium production in anticipation of rapid EV sales growth in the immediate term. This speculation turned out to be premature, leading to lithium price volatility during that period. We believe the current favourable lithium pricing environment and now well-established EV adoption trends have made miners more inclined to commit to ramp future capacity.

Annual lithium demand is projected to reach roughly 1.5 million metric tons of lithium carbonate equivalent by 2025 and over 3 million tons by 2030. EVs could account for about 84% of total lithium demand in 2030, up from about 55% in 2021. Consumer electronics, energy storage, and other industrial applications are likely to account for the balance of demand.

Lithium supply is likely to lag lithium demand through the first half of the decade. In the short term, notable lithium mining capacity is set to come online in late 2023 and early 2024. These new projects could cut into the deficit in 2023, but surging EV sales are expected to result in sizeable shortages again in 2024 and 2025. By 2025, EVs could account for more than 20% of global light duty vehicles sales, up from 9% in 2021.

Governments trying to build out lithium and EV supply chains are also incentivising lithium producers to increase capacity. For example, Albemarle will receive $149.7 million and Piedmont Lithium $141.7 million in federal grants from the Infrastructure Investment and Jobs Act to develop lithium facilities in the United States.

We view this increased willingness to expand future lithium supplies as a positive development for the EV space, with the commitments made now potentially promoting healthier market dynamics in the coming decades. However, even with these recent commitments, growth in demand for lithium is expected to outpace supply for some time.

The lithium market remains red hot, even as broader commodity markets have moderated in the latter stages of 2022. Used in most of the world’s batteries, this specialty chemical’s importance to the global economy is likely to continue. The electrification of transportation, highlighted by the mass adoption of EVs, is the major reason why. For lithium miners, we expect strong demand coupled with lithium’s long supply lead times to sustain a favourable pricing environment for a prolonged period.

  • Commodities, Investment, Investment opportunities

Related Post

cover-active-funds-sustainable-investments-private-assets-set-dominate-year-according-fund-selectors

Active funds, sustainable investments and private assets set to dominate 2023, according to fund selectors

Cover-Emerging-Markets-Artemis-RankiaPro.

Raheel Altaf (Artemis IM): “Emerging markets offer more diversification benefits looking ahead”

Cover-Invest-Wood-RankiaPro

Why is it a good idea to invest in wood?

NEWSLETTER
If you want to keep up to date with the latest news from the asset management industry and all our events, subscribe now to our newsletter.
Subscribe

Last Tweets

10h

🌤 The crucial role of resources in the energy transition debate

🔗#EnergyTransition #Resources #RankiaProEurope
...https://rankiapro.com/en/crucial-role-resources-energy-transition-debate/

10h

🗣️Change to @Amundi_ENG corporate governance

🔗 #Appoinment #Change #RankiaProEurope
...https://rankiapro.com/en/change-to-amundis-corporate-governance/

13h

🎙We introduce you to the new #AdvisoroftheMonth
João Martins, Senior Private Banker at ABANCA Portugal.
Don't miss
... his interview!

🔗#ProfessionaloftheMonth #RankiaProEurope
https://rankiapro.com/en/joao-martins-abanca-portugal-our-advisor-month/

14 Mar

🗣️ @Robeco launches Sustainable Senior Loan Fund

🔗#PrivateDebt #Sustainability #RankiaProEurope
...https://rankiapro.com/en/robeco-launches-sustainable-senior-loan-fund/

RankiaPro

  • Home
  • Insights
  • News
  • Magazine
  • Events
  • About us
Menu
  • Home
  • Insights
  • News
  • Magazine
  • Events
  • About us

Terms and uses

  • Cookies Policy
  • Privacy Policy
  • Disclaimer
Menu
  • Cookies Policy
  • Privacy Policy
  • Disclaimer

Contact

  • [email protected]
  • (+34) 963 386 976
  • (+34) 640 308 023

Newsletter

If you want to keep up to date with the latest news from the asset management industry and all our events, subscribe now.

Subscribe

All rights reserved © 2003 – 2023 Rankia S.L.

RankiaPro

  • Home
  • Insights
  • News
  • Magazine
  • Events
  • About us
Menu
  • Home
  • Insights
  • News
  • Magazine
  • Events
  • About us

Terms and uses

  • Cookies Policy
  • Privacy Policy
  • Disclaimer
Menu
  • Cookies Policy
  • Privacy Policy
  • Disclaimer

Contact

  • Email: [email protected]
  • Phone: 963 386 976 – 601 302 692

All rights reserved © 2003 – 2023 Rankia S.L.

Manage Cookie Consent
To provide you the best experience on our website, we use technologies like our own and third-party cookies for analytical purposes and to store device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique identifiers on this site. Not consenting or withdrawing consent may adversely affect certain features and functions.

To learn more, please read our Cookie Policy and Privacy Statement.
Functionality or Personalisation Cookies Always active
These cookies are necessary for the website to function or for the unique purpose of transmitting a communication over an electronic communications network, and cannot be disabled on our systems. Usually they are set up to respond to actions made by you to receive services, such as adjusting your privacy preferences or filling out forms. You can set your browser to block or alert you to the presence of these cookies, but some parts of the website will not work. These cookies allow the website to provide better functionality and personalisation. They may be set by us or by third parties whose services we have added to our pages. If you do not allow these cookies some of our services will not work properly.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics Cookies
These cookies allow us to count traffic sources in order to measure and improve the performance of our website. Storage or technical access which is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing Cookies
These cookies may be site-wide, placed by our advertising partners. These third parties may use them to create a profile of your interests and show you relevant adverts on other sites. If you do not allow these cookies, you may receive less targeted advertising.
Manage options Manage services Manage vendors Read more about these purposes
Cookie Settings
{title} {title} {title}
  • RankiaPro Europe
    • RankiaPro Spain
    • RankiaPro LATAM
    • RankiaPro Italy
Menu
  • Home
  • Insights
    • Equities
    • ESG
    • ETF
    • Fixed Income
    • Interviews
    • Market Outlook
  • News
    • Appointments
    • Asset Managers
    • Launches
  • Magazine
  • Events
    • Events & Conference calls
    • Rankia Funds Experience
    • RankiaPro Meetings
  • Podcast
  • MIFIDII Training

Follow us on social media

Linkedin Twitter Youtube Flickr

NEWSLETTER

Subscribe

Book now

Lithium market update: elevated prices are creating favourable dynamics for miners