Lithium: The shortage of supply speaks for further rising prices (The shareholder)

Kulmbach (www.aktiencheck.de) – The lithium stocks start the new year with profits, according to Markus Bußler from the investor magazine “Der Aktionär”.

The paper from Albemarle (ISIN US0126531013 / WKN 890167) was able to gain 1.2 percent yesterday, Lithium Americas (ISIN CA53680Q2071 / WKN A2H65X) gained 5.7 percent. One thing is clear: the lithium sector will not remain for the faint of heart in 2022 either. But the shortage of supply for the white light metal suggests that prices will continue to rise.

Electric vehicle battery prices are likely to rise in 2022 after falling sharply for a decade as the supply of lithium and other raw materials cannot keep pace with rising demand, speculates Nikkei Asia. While the mining companies would strive to increase production in the existing facilities and develop new sources of supply, the benchmark prices for lithium carbonate would have reached record levels by the end of 2021. The bin was traded at around $ 41,000. Other raw materials used in cathodes, the most expensive part of a battery, have also increased: The price of cobalt has doubled to $ 70,000 since January last year.

According to Bloomberg NEF, global electric car sales are estimated to reach 5.6 million vehicles in 2021, up from 3.1 million in 2020, driven by brisk sales in China. According to a December report by S&P Global, further demand growth in 2022 will result in a lithium deficit that year as consumption of the material exceeds production and depletes inventories. According to the S&P Global Market Intelligence report, supply is expected to increase to 636,000 tons of lithium carbonate equivalent in 2022, compared to an estimated 497,000 tons in 2021. However, demand will increase even more, from an estimated 504,000 to 641,000 tons.

Gavin Montgomery, research director for battery raw materials at Wood Mackenzie, said lithium prices are unlikely to crash like they have in previous cycles: “We are entering some kind of new era for lithium prices for the next few years because of the growth will be strong. ” In the short term, the supply will be limited. Australian producers have partially shut down their mines in 2020 after a period of low prices and, given the ongoing COVID-19 crisis, it has been difficult to reinstate workers and bring production back to pre-pandemic levels.

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