2023-08-02 15:07:59
August 02, 2023 Today at 5:06 PM
Although more and more lithium will be needed for electric batteries, this resource risks being in oversupply in the future, warns Bank of America.
What if lithium becomes superabundant? Given the increased need for energy storage, one would tend to think that lithium, an essential component of the most common electric batteries, presents a risk of shortage likely to drive up or even explode its price. However, this is not at all the case, according to a note published Tuesday by Bank of America (BofA).
“We expect lithium supply surpluses in 2024 and 2025.”
“The lithium market continues to grow exponentially,” notes the investment bank. “This high-speed progression implies that the market equilibrium varies violently between surpluses and deficits.. We expect excess supply in 2024 and 2025. A weaker fundamental backdrop is already visible in prices.”
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A mine in France
Since January, in fact, lithium has been gray on the markets. The price of a tonne of lithium hydroxide shows a drop of more than 50% at this point in 2023. BofA predicts it might be further halved, given the ramping up of lithium-bearing ore mining outside China.
430.000
Tons of lithium per year
Bank of America expects recycled lithium supply to reach 430,000 tons in 2030, compared to the overall market of 420,000 tons in 2020.
In particular, a lithium mine must come into operation in 2028 in Allier, France. Eventually, a production of 34,000 tons of lithium hydroxide per year is expected.
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Add to that recycling. of this precious resource. The supply of lithium from this sector “might reach 430,000 tonnes by 2030”, estimates BofA, who recalls that “the total size of the lithium market was 420,000 tonnes in 2020”. A shortage of lithium would therefore not be for tomorrow.
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