The first few months of the year have been good for the lithium market, with interest in battery metals increasing as electric vehicles appear in headlines around the world.
Supply & Demand
At the end of 2020, lithium prices were declining, but that came to an end with a bright start to 2021 as lithium prices rose.
After the first 3 months of 2021, the leading producers of lithium have positive projections for the future.
So far this year, lithium prices have exceeded expectations. A large part of that is that electric vehicle sales numbers have continued to rise after seeing an increase in 2020.
Although the market of electric vehicles might fluctuate, factories may want to build their stock of lithium-ion batteries, helping to keep the lithium market stable.
So in the event of decreased production or demand of electric vehicles, there will still be an incentive to produce lithium batteries.
What To Watch For
Government subsidies and OEM pledges will be important in determining electric vehicle growth in the second quarter as well as announcements regarding mine expansions or restarts will also be pivotal for determining supply over the next years.
Also, look out for announcements of government policy regarding domestic supply chains and electric vehicle sales, as these may contribute to the lithium market.
As environmental concerns become more prevalent in society, these issues may continue to influence the lithium market and how the industry operates.
Having so many investments in the downstream sector, the market will need more investments in the upstream capacity, so announcements on this may come forward as time moves on.