Lithium Is in Short Supply — But Probably Not for Long

Lithium Is in Short Supply — But Probably Not for Long

International and Arab News

A cautionary saying in oil circles about the possibility of peak demand holds that “the stone age didn’t end for a lack of stones.” When it comes to electric vehicles, there is more concern now that the electric age will fizzle for a lack of lithium.

Lithium-ion batteries power smartphones, laptops — and electric vehicles. When I wrote this back in 2016, analysts at Citigroup were speculating about the transformational effect on lithium demand if, in 2020, battery-EV sales were to hit 1 million. As it turned out, more than 2 million were sold that year — and almost 5 million in 2021, not including plug-in hybrids.

There was more than enough lithium to meet that extra demand — so much so that prices began sliding in 2018 and didn’t bottom out until 2020. But since then prices have surged. Battery-grade lithium carbonate in China hit more than $40,000 per ton in recent spot trades, according to Benchmark Mineral Intelligence, a London-based data and market-intelligence provider, up from less than $6,000 18 months ago. Even if prices paid under long-term contracts haven’t risen as fast, it’s clear the market has tightened drastically.

Political risk also appears to be rising. Serbia