Arbor Metals Corp V.ABR

Forecasts of Oversupply Conflict With Projections of Shortag

[Bilderberg]

Many major investment banks predict large lithium shortages persisting through the end of this decade. Yet contradictory to this, these same analysts forecast prices falling below $20/kg, which would not support the projected supply deficits. This potentially reveals a lack of lithium market understanding by major financial institutions. Lithium does not behave like commodities such as iron ore or gold. If demand figures stack up and we apply a discounted supply factor, $20-$40/kg is a realistic long-term price range based on the global lithium cost curve.

Lithium prices have experienced significant volatility in 2023, pulling back sharply from the over 500% surge seen in the prior two years. However, the long-term fundamentals for lithium remain highly favorable despite the recent turbulence.

• The lithium price has been volatile in 2023, influenced by multiple factors including unreliable information from China, economic uncertainties, and evolving incentives for electric vehicles (EVs).
• The spot price for lithium is not necessarily a reliable indicator of the market's health, as long-term contracts and varying prices in different countries give a fuller picture.
• Predictions for lithium price by year-end 2023 remain uncertain, but if major factors remain constant, the price could potentially rise higher than it was in 2022.
• Strategic investments from automakers and producers like General Motors and Albemarle are securing the value chain, and this trend is expected to continue into 2024. Energy companies are also showing interest in lithium.
• Despite a recent pullback in lithium prices, there are buying opportunities in the sector. The lithium industry is still in its early stages of growth.

https://www.cruxinvestor.com/posts/lithium-outlook-remains-strong-despite-recent-volatility