Lithium prices now trading at all time highs

Published 20-SEP-2022 09:40 A.M.

2 min read

Macro: Lithium

The following Bloomberg article touches on the structural supply shortages experienced across the lithium supply chain.

This comes as the lithium price traded at a record high on Friday at US$71,315 per tonne.

For us, it points to just how important it is for the mining industry to make new lithium discoveries match the exponentially increasing demand for lithium.

Without massive investment in new exploration, we simply won’t have enough lithium to catch up with the demand from battery makers.

Last week, we saw a presentation from Benchmark Minerals Intelligence senior lithium analyst Dr Cameron Perks, who touched on the timing differential between building upstream (new lithium mines) and downstream demand (battery manufacturing facilities).

Whilst it could take ~25 years for a new discovery to be put into production, downstream facilities can be built as quickly as <24 months.

As a result, we see the shortage lasting for at least the next five years.

Read the full article here.

Our key takeaways:

Lithium carbonate traded at all time highs on Friday (US$71,315/ tonne) - almost 3x higher than this time last year.
Price increases coming from higher electric vehicle (EV) sales forecasts which are expected to hit a record 6 million this year, double the 2021 total.
Soc. Quimica & Minera de Chile SA (SQM), the world’s No. 2 lithium producer, predicted a “very tight market” in the years ahead.
Battery-makers and automakers are rushing to lock in reliable and stable lithium supplies. Still, the lithium price continues to remain extremely high.

We hold investments from the exploration stage up to development ready projects in the lithium space.

Below is a list of our lithium Investments:

Vulcan Energy Resources (ASX: VUL) - Next Investors Portfolio