Availability of lithium
According to the US Geological Survey, known resources are very vast : estimated at 40 million metric tons globally in 2016, lithium resources estimates doubled to approx. 80 million tons by 2020 - and continue to increase - at 98 million tons (2022 statistics published in 2023)
Based on 2022 estimates, the world’s largest reserves (50 million metric tons) are located in the Atacama Desert, the ‘lithium triangle' shared by Chile (11 million metric tons), Argentina (20 million metric tons) and Bolivia (21 million tons); further reserves are found in the U.S. (12 million tons), in China (6.8 million tons) and Australia (7.9 million metric tons)
Mine production for 2020 of 82 000 tons reached 13 000 tons in 2022, mainly supplied by Australia (increasing from 40 000 tons in 2020 to 61 000 tons two years later), Chile (from 18 000 tons to 39 000 tons) and China (from 14 000 tons to 19 000 tons)
Delays in opening new extraction facilities, in gearing up production and in delivering battery-grade lithium are expected to weigh on supply for years
While EV demand falls well below expectations, demand for batteries (80% of lithium use) is still expected to build-up exponentially and supply may not catch up until 2030...
Demand for lithium and a price roller coaster
The run-up in price from $2 000 per ton in 2000 peaked in March 2018 at $23 750 per ton in China before dropping back, according to prices tracked monthly by Benchmark Mineral Intelligence (BMI)
Driven by an expected break-through in electrical vehicles powered by Li-ion batteries, the market is assuming a fast uptake of the new technology, bottlenecks in additional extraction capacity and absence of better battery technology in the foreseeable future
Due to lack of investment in mines after prices declined following the 2018 boom, prices for battery grade lithium carbonate in China surged to approx. $13 500 per tonne in March '21, jumped to $28 000 in October '21, about three times the early 2020 prices and reached an all-time high of $81 000 per tonne in November 2022 (source BMI, quoted by ETF provider Global X)
The supply-and-demand imbalance for lithium led to price reversal in 2023, falling by 90% : a brutal slide in price erased the 2022 increases, bringing prices down to $17 000 per tonne in November 2023
Reflecting the transportation segment’s ongoing shift toward electrification, and the imbalance between surging demand and lithium supply upgrades constraints, the upward trend was on track, unabated
Carmarkers seeking supply security could have caused scarcity and emerging applications of much cheaper sodium-ion batteries might pressure lithium prices further in the future
