November 7, 2023
Despite recent price drops and concerns over a potential slowdown in the global electric vehicle (EV) adoption rate, major lithium producers and players in the EV industry remain optimistic about long-term demand for lithium, a critical component in EV batteries. Companies such as LG Energy Solution, General Motors, and Honda have scaled back their EV expansion plans, partly due to rising interest rates and supply concerns. A basket of lithium prices tracked by Benchmark Mineral Intelligence has fallen over 60% this year. However, while short-term concerns have impacted the market, there is confidence in sustained electrification growth.
Producers believe the current market volatility is temporary, with the supply chain rebalancing in response to various factors. Lithium remains a fundamental material for EV batteries, and demand is expected to rise in the coming years, even if the pace may vary. Companies like Livent, which supplies lithium to BMW and Tesla, anticipate strong lithium sales, emphasizing that supply constraints are more likely to impact demand. While lithium prices have seen significant fluctuations, producers like Albemarle and IGO maintain their long-term growth outlook for electrification. Lithium experts encourage focusing on a range of lithium prices, not just spot prices, as they remain higher than historical trends, and they haven’t observed a significant decline in demand that would validate the trajectory of the spot price.
Source: mining weekly
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