Deutsche Bank has become the latest big investment house to jump on board the lithium bandwagon, although its in-depth analysis of the red-hot market includes some insights that could worry those backing the lithium sector’s less advanced players.
A note from Deutsche Bank, Welcome to the Lithium-ion Age, projects “unprecedented demand growth” for lithium in the years ahead due to the rapid growth in electric vehicles and energy storage using lithium-ion batteries.
The outlook prompted the bank to upgrade ASX-listed pair Orocobre and Mineral Resources to buy recommendations. Both are likely to benefit from a deficit in the lithium market.
But the bank also said there were vast amounts of lithium resources identified around the world, and warned that huge brine-based lithium projects in Chile and Argentina would keep pace with the growth in demand and eventually tip the market into oversupply.
The Deutsche Bank analysts found there were enough lithium reserves around the world to meet annual demand for almost 600 years. Most major commodities have between 15 and 100 years of reserves based on 2015 supply.
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