Raymond James - Lithium Market Update May 15

dan_s · Post by **dan_s** » Mon May 15, 2023 10:29 am

Energy Stat: Lithium Prices Cooling Off (Finally), But Fundamentals Remain More Bullish Than the Pre-COVID Era

In 2021, lithium was the world’s best-performing commodity — spot price up 6x — and, in ordinary times, that would be a very hard act to follow. Well, to state the obvious, there was nothing ordinary about the aftermath of the COVID crisis and resulting supply chain complications, which helps explains why lithium was the second-best performer (behind coal) in 2022. Towards the end of 2022, and year-to-date in 2023, prices have noticeably cooled off, which in our view is entirely healthy. This report, co-written with RJ Ltd.'s head of mining research, is our annual update on the global lithium market.

On the demand side of the equation, batteries play a more dominant role than ever before, comprising 80% of the market, propelled by the electric vehicle and grid-scale power storage adoption curves. On the supply side, it remains the case that lithium resources are abundant around the world — not solely in the core producing areas of Australia and South America — but meeting long-term demand growth requires hefty capital investment. Price volatility and political complications (Chile is currently front-and-center) will never disappear, and we should also be mindful of project-level risks that are heightened for pre-production companies. We conclude the report with a guide to how investors can get exposure to the lithium market.
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We have two promising lithium companies (based in Canada) that are hosting webinars for us this month.
> May 24: Volt Lithium Corp. (VLTLF) https://voltlithium.com/
> May 30: LithiumBank Resources Corp. (LBNKF) https://www.lithiumbank.ca/

I am very bullish on the potential market for rechargeable batteries, even though I believe the outlook for EV's is not as bullish as all the hype. Why? Because rechargeable batteries could significantly improve the standard of living in areas of the world that do not have the steady electricity that we enjoy in the U.S. and Canada.