Lithium Prices Have Yet to Peak, but Expect Surprises

Fastmarkets’ William Adams: Lithium Prices Have Yet to Peak, but Expect Surprisesyoutu.be

Lithium prices rallied last year, with strong demand and a bright outlook for the electric vehicle sector providing support as automakers continue to seek ways to secure supply.

But after reaching all-time highs, prices have started to stabilize, with factors like fresh COVID-19 measures in China hitting the market for the battery metal.

At this year’s Fastmarkets Lithium Supply and Raw Materials conference, the Investing News Network (INN) sat down with William Adams of Fastmarkets to get his insight on what’s been happening in the lithium sector.

“What we’re seeing is just a pause on the demand side because of the lockdowns in China,” he said. “And I think it’s more that consumer demand has been constrained rather than falling back.”

As lockdown measures ease, Adams is expecting lithium prices to move higher.

“I don’t think we’ve seen the peak in prices yet,” he told INN at the event held in Phoenix, Arizona. “We expect to see that towards the end of this year, or maybe the first quarter next year.”

Concerns that the market might go back to an oversupply situation have made a comeback in the lithium space as producers and newcomers announce expansion plans, restarts and new projects.

“When you’ve got new supply coming on stream, each of those new production lines needs to be qualified,” said the head of base and battery metals research at the conference. “So that means that a lot of potential consumers won’t take that material until they see that new production line running a steady state. And once they’ve got that, then they’ll take samples and get that qualified.”

Listen to the interview above for more of Adams’ thoughts on lithium, including where he sees prices going and his short-term outlook for the market. You can also click here for INN’s full playlist from the event on YouTube.

Don’t forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.