If lithium prices do not recover, there could be a demand overhang by 2025 that is up to three times that of supply. The president of lithium mining leader Albemarle Corp has warned of a flagging global lithium market.
In the lithium market, the situation between industrial metal suppliers and car manufacturers is slowly but surely escalating. While the extractors want to sell the metal at the highest possible price, electric car manufacturers, on the contrary, demand discounts.
And they can really do well. The price of lithium has fallen significantly over the past year due to a coronavirus pandemia. Such a development forced Albemarle, one of the world’s largest lithium producers, to dampen its expansion. “We can only reverse this step when the price of lithium makes sense,” Eric Norris, who runs the metal business in Albemarle, told a Reuters conference.
At the end of the year, global lithium supply was almost the same as demand. However, by 2025, demand could outst exceed supply by up to 228,000 tonnes. The price of lithium could thus increase. Indeed, this began to happen before the end of last year, when China saw an increase in electric vehicle production. If the trend continues, Albemarle will also begin to increase its capacity.“We’re ready for it, but we’re not going to do it at all costs,” Norris added.