Lithium supply is set to triple by 2025. Will it be enough?

Lithium prices plummeted in 2019, as the market tipped into oversupply and EV growth slowed. Production of the battery metal is set to almost triple by 2025 to more than 1.5 million metric tons, but there are concerns that a fall in upstream investment could flip the market into undersupply further out. Lithium is an integral component of batteries for electric vehicles. As EV purchases have rocketed – over 2 million vehicles were sold in 2018 alone, according to S&P Global Platts Analytics –so has the need for batteries, in turn fueling lithium demand. On the expectation of further fast growth, investment has flowed into the lithium supply chain at a brisk pace over the past few years. However, prices have dropped this year, drawing down with them enthusiasm for new projects. One project facing difficulties is Nemaska Lithium’s Whabouchi mine in Quebec, Canada. Nemaska recently announced layoffs as it attempts to ensure optimal cash flow for the continuation of the Whabouchi project. Another is China’s Tianqi Lithium’s plant in Western Australia, which began lithium hydroxide production in September. Alongside the start of operations, Tianqi announced the postponement of the second half of the 48,000 mt/year project, citing poor global… continue reading

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Source: CTRM Center

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