Lithium prices to keep rising as demand outpaces supply – by Nicki Bourlioufas (Australian Financial Review – May 16, 2023)

Lithium prices are set to extend their recovery from a brutal sell-off of 70 per cent as demand outstrips weaker-than-expected lithium supply growth, underpinned by the growing take-up of electric vehicles to meet carbon emission targets.

The recent rise in lithium prices follows a horror five-month period during which tumbled more than 70 per cent after China curbed electric vehicle (EV) subsidies in January, a move that led to faltering demand and rising inventories.

Now those inventories are winding back and at least one broker, Morgan Stanley, believes lithium markets have reached a turning point.

Lithium is an important element to create renewable energy given its use in lithium-ion batteries, used to power EVs and to store energy generated from renewable sources such as solar and wind power. As more countries move towards clean energy, the demand for lithium is expected to keep on rising, which will push up its price, even as supply increases.

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