“While by year-end 2022 the rate of production might be higher than actual consumption, production will have taken time to ramp up to that level, plus apparent demand will be higher than actual demand given the need to restock and build up working stock for the new manufacturing capacity being brought online,” Adams said.īenchmark Mineral Intelligence is also forecasting that the market will be in deficit during 2022, which could impact output from the EV industry. In fact, all things considered, the firm expects a supply deficit in 2022. “Additional production units will also take time to become commercially available given qualification times, and since stocks have been run down the supply chain will need to restock.”įastmarkets expects this supply response will alleviate some of the tightness, but will not lead to another oversupply selloff as seen in 2019 to 2020. “We expect a significant supply response, but it will be needed,” Adams explained to INN. Looking over to the supply side of the story, 2021 saw merger and acquisition activity pick up pace, as producers and developers prepared to meet the increasing demand for lithium. “Yet demand is likely to grow fastest in China, which still dominates the cathode and cell production landscape,” Miller said. In terms of lithium demand, Benchmark Mineral Intelligence anticipates burgeoning battery-grade demand from outside Asia as commissioning and first commercial production begins at some cathode facilities. “But we also expect demand from energy storage applications to gather pace.” “Other reasons for expecting strong growth are there will be more EV models available, therefore more choice for consumers, and an easing of semiconductor shortages as 2022 progresses should mean supply constraints should not hold sales back,” Adams said.
Stocks predicted to skyrocket pro#
“In the January to October period, sales have grown by 189 percent in China, 157 percent in Europe (January to September pro rata) and by 94 percent in the US.”Īs 2022 kicks off, Fastmarkets expects continued strong growth in all regions, especially in the US as the country plays catch up with Europe and China. “EV sales were spectacular in 2021,” Adams said. In 2021, one of the major catalysts that impacted the lithium space was the extent of growth in the EV industry.
“Alita, which was one of the first to close, has no restart date - this despite record lithium and spodumene prices.” “While some have been announced and are in the process of being restarted, such as Pilbara Minerals’ (ASX: PLS,OTC Pink:PILBF) Ngungaju plant, some idle production, such as Wodgina, is not scheduled to restart until later in 2022,” Adams said. This coexists with demand for higher-nickel cathode types, such as NCM, in all end markets NCM batteries can provide longer-range travel and higher energy density for consumers with range anxiety.Īnother trend seen in the lithium space in 2021 was the slow response from producers in announcing the restart of idle capacity - something that was expected to happen throughout the year. The popularity of LFP cathode material has been on the rise, particularly in China, for shorter-range, durable, lower-cost EVs.
“The other surprise was the extent to which lithium- iron- phosphate (LFP) batteries have gained market share relative to nickel- cobalt- manganese (NCM) batteries and the impact that has had on carbonate prices,” Adams added. “The major surprise has been the extent to which they have rallied,” William Adams of Fastmarkets told INN.ĭomestic China lithium salt prices were up by around 350 percent since the start of 2021, with CIF China, Japan, Korea carbonate prices up by 374 percent and hydroxide prices up by 245 percent, as per the firm’s data. This was a pattern Fastmarkets expected other regional lithium prices to follow in 2021. In the last quarter of 2020, a year that tested the supply chain resilience of every market, lithium prices in China started to recover. “(They are) now above US$40 per kilogram in China, underscoring a rise of nearly 60 percent during the (fourth) quarter, and nearly 500 percent across 2021,” he said. The lithium market outperformed expectations in 2021, with prices traded on the Chinese and international spot market rising to well above US$30 per kilogram, George Miller of Benchmark Mineral Intelligence told INN. Top Battery Metals Stocks on the TSX and TSXVĪt the end of 2020, analysts were optimistic about pricing for lithium in the year ahead - but the speed and amount of the uptrend caught many by surprise.
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