Understanding lithium demand, page-53

Just to add a bit more to this informative supply/demand debate.

1) Supply expansion is on average always short or late from the ideal company announcements. SQM, ALB, PLS, AJM...just about everyone is behind on their timelines if one looks back a couple of years. Add in the 2018/2019 lithium sentiment downturn and its effect on slowing capital going to new project, stalling their progress.

2) Demand continues to surprise on the upside. EV sales continue to grow at above 50% per year. 63% in 2018, 58% in 2017 and the major EV makers are only starting to release their new EVs. The model below assumes a lower 50% growth and illustrate the crazy LCE demand entirely from EVs under such a scenario. This will not happen as supply can't keep up (see below).


Example of ALB re-graphing its ever increasing estimates yearly. Now looking at over 1 Mt/y LCE by 2025. Note that UBS, after similar yearly revision increases, also has a forecast of 1.15Mt/y [source]

In reference to the above increase of some 300kt/y LCE in ALB's forecast this year, Simon Moore of Benchmark Mineral Intelligence suggests that supply will bottleneck growth. Clearly a good thing for prices.




And today, we have PLS in its stage 3 SS announcement showing this interesting graph which sees carbonate and hydroxide price starting to climb again soon (contrary to Morgan Stanley oversupply fears which claimed the oppose).



The key in all of this is EV sales. It's why I watch them so closely each month. At the growth rates of the last 2 years, in spite of the lack of EV models available to the general public, demand will swamp supply.