Why bad news is good news for lithium stocks – by James Thomson (Australian Financial Review/Chanticleer – January 30, 2023)


Bullish new forecasts for lithium demand have coincided with setbacks to new supply projects. That’s ultimately good for prices, but not for the electric vehicle sector’s big ambitions.

It’s unlikely that many Australian investors are following the travels of German Chancellor Olaf Scholz. But his current trip to South America underscores a new front in the global race for arguably the world’s hottest commodity: lithium.

Scholz signed an agreement with Argentina that is designed to help German industry secure lithium supplies from the South American giant. On Sunday, he was in Chile – the world’s second-largest supplier of lithium after Australia – seeking a similar deal.

The bulk of the world’s lithium chemicals are scooped up by China’s battery manufacturing sector. But Germany – home to car giants such as VW, which wants to invest $80 billion in electric vehicles between now and 2026 – needs a slice of that action.

More broadly, Scholz’s trip again highlights questions over the size of the gap between lithium supply and demand, and how and when it will get filled.

For the rest of this column: https://www.afr.com/chanticleer/lithium-sector-is-struggling-to-solve-its-big-problem-20230130-p5cggc