The Trend Investing forecast below shows peak EV sales acceleration (in terms of number of units sold) should occur from about now to 2035. Win at Retirement Our latest articles and strategies for the post-work life you want. Sign Up for Take Stock Investment news, stock ideas, and more, straight to your inbox. The market has reacted badly to this ASX 200 company’s half-year result. The deal triggered protests by local indigenous groups who blocked roads to SQM, causing a pause in operations. Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams.

However, given that much of the new supply will come from greenfield projects, which have historically faced delays in nearly all resource extraction industries, we think a scenario in which all new supply enters the market on time is unlikely. The September 2023 chart below from Macquarie shows the various Chinese lithium producers cost of bitit review production. Back in September 2023 the lithium carbonate spot price was at ~US$21,000/t (blue-dotted line), a price where the Chinese non-integrated spodumene producers were starting to become unprofitable. China lithium carbonate spot prices have fallen ~82% from their 2022 high and are now well below the marginal cost of production.

Global supplies for the electric vehicle battery metal outpaced demand over 2023, fuelling a glut that has dragged on prices and caused producers such as Albemarle, the world’s largest supplier, to cut jobs and pause expansions. In 2022 we saw most EV metals prices surge higher, as EV demand soared (107% in 2021 and 56% in 2022). Then in 2023 we saw prices collapse as demand slowed (EVs grew ~30% YoY in 2023), supply surged, and excess inventory was wound down. Of course the EV metals sector is new and very vulnerable to swings in supply and demand.

Dongshu has blamed the  Lunar New Year and the end of EV subsidies for the decline. Starting Jan. 1, 2023, Beijing no longer offers subsidies to buyers of electric vehicles, ending 13 years of the government offering subsidies to EV buyers to achieve price parity with internal combustion vehicles. The company said it expected lithium sales just2trade forex volumes to increase 5%-10% this year, with global demand forecast to rise 20%, although warned that oversupply would hold prices steady. With such a limited supply, any increase in demand can truly boost the price of the metal in the world market. And that’s happening right now because of the current success of the Tesla car company.

Electricity 2024

By the time their operations come on line, they could be dealing with wildly different lithium prices. The Trend Investing group includes qualified financial personnel with a Graduate Diploma in Applied Finance and Investment and well over 20 years of professional experience in financial markets. They search the globe for great investments with a focus on trending and emerging themes. The current focus is on electric vehicles, the EV metals supply chain, stationary energy storage and AI. Lithium supply is driven by current producers expanding and new projects coming online.

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Lithium futures are pointing towards marginally higher prices for the first time since the GFEX market began

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. “The excess in lithium and battery materials … is expected to continue during this year, keeping pressure on lithium market prices,” SQM chief executive Ricardo Ramos said in a statement.

1. The chart below forecasts that if EV adoption and ESS surges (top line) we will get large lithium deficits again this next decade.
2. By the end of 2016, this will grow to as much as 25% by the end of 2016.
3. Very strong December 2023 global EV sales should mean that the cathode and battery manufacturers will need to do some restocking, particularly if EV sales growth holds up in H1, 2024.
4. In 2022 we saw what happens when EV demand surges and in 2023 we saw what happens when supply surges.

By the end of 2016, this will grow to as much as 25% by the end of 2016. Investors can draw their own conclusions on what scenario (base case or high case demand) will likely play out. In 2022 we saw what happens when EV demand surges and in 2023 we saw what happens when supply surges.

The irony is that we are near the beginning of an EV metals supercycle where demand for EV metals will potentially skyrocket over the next decade, assuming we continue to move towards electrification of global vehicles. For most people in previews decades, lithium was either a controversial treatment for brain disorders or a song by Nirvana. In the 1790s, a Brazilian naturalist discovered the mineral called petalite on an island in Sweden. This mineral us usually white to grayish in color, but when it’s thrown into a fire it flares into bright red. As the chart shows, CAM manufacturers have been destocking at a fast pace, once battery inventories return to normal level then orders should start to flow upstream again…

H2, 2025 may see the next surge in EV sales as cheaper EVs become available in the West from BYD, Tesla and others which may lead to the next lithium price surge. Just last week BYD launched the Dolphin Mini (Seagul) in South America starting from US$20,100. Lithium demand is mostly driven by EV adoption and to a lesser degree energy stationary storage (“ESS”) adoption. The chart below forecasts that if EV adoption and ESS surges (top line) we will get large lithium deficits again this next decade. Chile’s SQM, the world’s second-largest lithium producer, on Wednesday posted an 82% fall in its fourth-quarter net profit from a year earlier, below forecasts as prices for the key battery metal continued to slide from earlier peaks.

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Then in 1817, a chemist in Sweden found that petalite contained a previously unknown element. While he was able to isolate one of the salts, he failed to isolate the mineral completely. It was in 1855 when a British and a German chemist were able to separate the metal entirely. This discovery led to the commercial production of lithium metal which began in Germany in 1923. The author or authors do not own shares in any securities mentioned in this article. Assuming we move to a 100% EV world the two charts below summarizes the massive demand surge for key EV metals.

On Oct. 18, lithium stocks plummeted following a sell-side broker’s downgrade for Albemarle ALB and SQM SQM. This was because of expectations that the lithium market will see a supply surplus in 2024 and 2025, leading to lower prices. We disagree, and continue to forecast a price rebound as strong demand growth outpaces supply, leading to a deficit in 2024. One of the best performing areas of the Australian share market in 2022 has been the lithium industry. Thanks to sky high lithium prices, a number of lithium shares have recorded exceptionally strong gains for investors. If Goldman Sachs is on the money with its estimates, then it could be bad news for developer/explorers that aren’t expected to be producing lithium for a couple of years.

This is resulting in severe cost cutting and several mines going into care and maintenance, which over time reduces supply. Lithium is mainly used for energy storage such as batteries for electric vehicles and sustainable energy generation. The price of Lithium is expected to rise substantially in coming years as the world moves further towards using green energy and lower carbon industry. Even better for EV enthusiasts, falling lithium carbonate prices is great news for the EV revolution.

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Today, more and more people also know lithium-ion batteries, because of the proliferation of mobile devices such as smartphones and tablets. We see lithium stocks as undervalued as the market expects a supply surplus, but we disagree. Assuming we move to a 100% EV world the demand surge for EV metals will be virtually unprecedented in history.

Thankfully, many analysts expect the slowdown in the lithium and EV markets to be a temporary blip. The miner, which also produces fertilizers and industrial chemicals, reported a quarterly net profit of $205.9 exness company review million, below the $317 million expected by analysts polled by LSEG, after a gradual slide in earnings over 2023. Also in 2012, the automotive sector accounted for 14% of the Li-ion battery market.

Investing in Lithium

This is also dependent upon lithium prices being high enough to incentivize (and hence finance) expansion and new production. At current lithium prices there is minimal incentive for many new projects. “New energy car sales in January didn’t meet our expectation, with a rare year-on-year decline in a single month’s sales,” Cui Dongshu, secretary general of CPCA, has revealed in an online briefing on Wednesday.

First, a rare slowdown in EV demand in the pivotal Chinese market has taken the markets by surprise. According to the China Passenger Car Association (CPCA),  sales of new energy vehicles, including pure battery EVs and plug-in hybrids, fell 6.3% in January, a sharp contrast to a blistering 90% growth in 2022. Ultimately, Goldman is forecasting global lithium demand to grow to ~1,300kt LCE by 2025, but expects lithium production to hit ~1,700kt LCE. “Demand is still healthy, but battery and EV makers are currently destocking instead of placing new orders. The subdued spot demand therefore is weighing on sentiment and pressing down prices,” Susan Zou, Shanghai-based vice president at Rystad Energy. SQM said it expected to produce 210,000 tons of lithium carbonate in the first quarter this year as it ramps up its Chile operations, adding that 2024 capital expenditure would come to about $1.3 billion.