(Bloomberg) — Electric-vehicle makers are hoping that an imminent wave of lithium supply will bring relief for their expansion plans after a two-year squeeze, but the battery metal’s die-hard bulls warn of more pain to come if producers fail to deliver.
Rampant lithium demand has caught many forecasters by surprise, with booming global EV sales causing consumption to double over the past two years. With suppliers unable to keep pace, a blistering price rally sent the total spot value of lithium consumption rocketing to about $35 billion in 2022, up from $3 billion in 2020, according to Bloomberg calculations.
Some bearish lithium-watchers say fast-growing supply, rather than dizzying demand, will be the decisive factor in 2023. Five analyst forecasts reviewed by Bloomberg point to a much more balanced global market after clear shortages in 2022, while BYD Co., China’s top EV seller, is counting on a lithium surplus.
But there are many skeptics who warn of fresh tightness if miners from Chile to China and Australia hit hurdles in launching daunting volumes of new supply. The reviewed forecasts peg production increases of between 22% and 42% in 2023: a breakneck pace for any complex extractive industry.
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