Lithium Markets To Be Oversupplied Despite EV Growth – Moody’s

The lithium market is expected to be in oversupply in the early 2020s, despite rapid demand growth from the electric vehicle (EV) battery industry, a new report by Moody’s Investors Service states.

Lead author Joseph Princiotta says the surpluses will be greatest between 2020 and 2022, when a heavy concentration of new mine and conversion start-ups are forecast. This is despite assuming a 30% to 40% haircut to announced capacity, delays to new projects and a slower build-up of supply in the conversion part of the supply chain.

The oversupplied market will put pressure on spot prices for the metal, but Princiotta says the effects will be minimal for major lithium producers, such as Albemarle and FMC (Livent), which mainly focus on long-term contracts with minimum prices and other protective terms.