Jennifer's avatar
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Lithium Supply Risks Ahead
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According to the S&P Global Market Intelligence, plug-in EV sales across key markets China, Europe and the US were up 96 percent year-on-year in the first quarter of 2022, despite weaknesses in the overall vehicle market caused by the ongoing computer chip shortage.
The long-term EV sales outlook is positive, which means lithium's recent demand breather could be temporary.

“We don't know how long the lockdowns are going to last in China, but the underlying fundamentals are still there,” William Adams, head of base and battery metals research at Fastmarkets, said at a recent webinar. “The lithium market is very tight. We don't see that easing anytime soon.”
Joey Hirendernath's avatar
How "finite" is Lithium?
Eric Messenger's avatar
@joeyhirendernath more finite than most metals. I don’t have the exact data but arising alternative energy in college ~2013-15, they told us then lithium would be crazy expensive because it wasn’t as abundant as other metals. Not a rare earth either, so somewhere in the middle. I knew it was coming, I just tried to get in too early (not knowing anything about the industry). Should’ve started studying that industry then, the writing on the wall was more obvious than any trend I’ve personally observed in my 40 years. I just can’t believe it took another 5-7 years for this Lithium era to really arrive.
Jennifer's avatar
According to Science Direct, lithium is the 33rd most abundant element in nature and is distributed widely in trace amounts in rocks, soils, and surface, ground, and sea waters.
It's a complex question though, estimating reserves is difficult:

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The supply required for rapidly accelerating EV demand should decrease, as new technology & recycling methods will reduce required extraction levels:

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'Technological breakthroughs in the sector mean that lithium can be extracted more sustainably from brines in addition to increasing yields, while the development of a lithium recycling industry is a foregone conclusion. This ensures that the world will not be in a position to run out of lithium.'


Analysts still see plenty of reasons to remain bullish on the commodity.
Citi, UBS and Barrenjoey this week issued fresh upbeat research on the lithium sector, which has experienced phenomenal gains in the past two years as demand for electric vehicles outpaces supply. After lithium prices rose more than tenfold during the past year, Barrenjoey raised its 2022-2027 forecasts by 73 per cent, which “remain conservative against spot pricing”.

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