Surpluses of lithium will emerge, particularly during the mid-2020s, when a heavy concentration of new mine and conversion start-ups is expected, said Joseph Princiotta, senior credit officer at Moody’s Investors Service. The imbalance will occur “even with obstacles to new supply and assuming a 30-40% haircut to announced capacity,” he said. The surplus will weigh on spot prices “despite rapid demand growth for the metal to make electric vehicle batteries”. Spot price weakness will be minimal for major lithium producers such as Albemarle and Liven, because the companies rely mainly on long-term contracts that have minimum prices and other protective terms to preserve margins, he said.
Surpluses of lithium will emerge, particularly during 2020-2022, when a heavy concentration of new mine and conversion start-ups is expected, said Joseph Princiotta, senior credit officer at Moody’s Investors Service. The imbalance will occur “even with obstacles to new supply and assuming a 30-40% haircut to announced capacity,” he said. The surplus will weigh on spot prices “despite rapid demand growth for the metal to make electric vehicle batteries”. Spot price weakness will be minimal for major lithium producers such as Albemarle and Liven, because the companies rely mainly on long-term contracts that have minimum prices and other protective terms to preserve margins, he said.