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Lithium demand will triple by 2025: Credit Suisse

Demand for lithium could triple by 2025 from 2020 levels, but higher prices would be needed to incentivize the required supply response, according to Credit Suisse projections.

Despite the unprecedented global disruption precipitated by the Covid-19 pandemic, throughout 2020 and the first half of 2021 there was a resurgence in the market position for lithium with an allied rebound in demand and prices.

In 2020, lithium prices were affected by a weakening in demand caused by lower demand related to Covid-19 lockdowns that restricted manufacturing output and eroded consumer confidence.

By the turn of the year, prices had started to rebound, with prices reported in December 2020 for 99.5% CIF China, Japan and Korea midpoint grade lithium carbonate battery spot prices at US $ 6,750 and a 56.5% low of CIF China, Japan and Korea lithium hydroxide battery grade mid-point spot prices at US $ 9,000 per ton, respectively.

Then, according to the Bacanora Lithium company, during the first half of 2021, the prices of lithium products continued their upward trajectory, for June 2021 prices continued to be strong with lithium carbonate and lithium hydroxide, both at the US. $ 13,500 and US $ 15,000 per ton, respectively.

This trend has continued into the third quarter of 2021, with Fastmarkets reporting prices of US $ 14,000 and US $ 15,500 per ton respectively in July 202111.

According to Fastmarkets, prices were US $ 7,500 and US $ 9,750 per ton for lithium carbonate and lithium hydroxide in June 2020, respectively, this represents between an increase of 27 and 54% year-on-year.

Lithium demand

Orocobre announced that Olaroz lithium carbonate was sold in the first quarter of 2021 at an average of US $ 5,853 per ton FOB with a price increase of more than 50% in the fourth quarter of 2020 and almost 90% from the third quarter of 2020.

The company provided advance guidance that the sales price for the second quarter of 2021 was expected to be US $ 7,400 per tonne. This boost in the price of lithium is a consequence of the market adjustment as the electric vehicle revolution accelerates and demand has eroded the excess supply seen in 2019 and 2020. This tension in the market is expected to continue.

 

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