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Good afternoon,

The Australian government in March 2022 forecast global demand for lithium could rise:

• to 636,000 tonnes of lithium carbonate equivalent (LCE) in 2022, from 526,000 tonnes in 2021;
• that demand was expected to more than double to 1.5 million tonnes by 2027 as global EV adoption continues to rise;
• estimated global lithium output to increase slightly above demand to 650,000 tonnes LCE in 2022 and that there would be 'tight market conditions. '

It is assumed that increase in lithium output, may not be able to catch up with demand from battery producers.

Lithium prices fell between 2018 to 2020 due to oversupply as miners, such as Pilbara Minerals and Altura Mining, increased production.

The difference between then and now, for mine, lithium prices started to climb early 2021 in line with EV growth and perhaps the global economy rebounding from the effects of the Covid-19 pandemic.

The Australian Government has published its Resources and Energy September 2022 Quarterly Report (Dept. of Industry, Science and Resources, Office of the Chief Economist):

[URL unfurl="true"]https://www.industry.gov.au/publications/resources-and-energy-quarterly[/URL]

This is the one point of truth for the federal government and the report contains a wealth of information concerning commodities and economic outlook.

With respect to Lithium, it is anticipated to become a $10 billion-plus export industry within a year, moreover:

• Metals central to the global energy transition (copper, nickel, lithium) are set to earn $33 billion in 2022–23, double what they earned in 2020–21;
• Spodumene prices are forecast to rise from an average US$598 a tonne in 2021 to US$2,730 a tonne in 2022, and US$3,280 a tonne in 2023 before moderating to US$2,490 in 2024. We expect lithium hydroxide prices to lift from US$17,370 a tonne in 2021 to US$38,575 a tonne in 2022 and US$51,510 in 2023, and moderate to US$37,650 by 2024;
• Australia’s lithium production is forecast to grow from 247,000 tonnes of lithium carbonate equivalent (LCE) in 2020–21 to 387,000 tonnes in 2022–23 and 469,000 tonnes of LCE in 2023–24; and
• Australia’s lithium export earnings are forecast to increase by more than ten-fold in just two years from $1.1 billion in 2020–21 to $13.8 billion in 2022–23, and ease to $12.9 billion by 2023–24.

For mine, unless there are startling technological advances which hampers demand, potential new variants of the pandemic and problematic supply chains triggered by high levels of inflation, rcw1 believes Lithium will heading in the right direction for some time.

Further reference

[URL unfurl="true"]https://capital.com/lithium-price-forecast[/URL]

Kind regards

rcw1