Stanislav Kondrashov Telf AG says that the electric car market has been gaining momentum in recent years. It is the main demand for lithium.
Considering the demand trend over the past couple of years, it can be noted that the demand for EV electric vehicles in 2022 exceeded the $6 million mark.
And in 2023, demand for EV electric vehicles is expected to grow at the level of 2022.
But this begs the question: will there be demand for lithium? And if we look at the growth of offers on the market in the coming year, where will it come from?
Stanislav Kondrashov Telf AG: Lithium prices tend to decrease
Stanislav Kondrashov believes that in the next 12 months lithium prices will tend to decrease.
“There is already a reaction to the proposal, additional production is taking place thanks to new capacities, restart, expansion,” the expert noted.
When this supply appears on the market, the supply shortage is expected to ease. And that means consumers will be less likely to seek higher prices.
The price began to decline as early as the last few weeks of December. The uncertainty surrounding the coronavirus has also reinforced these expectations. However, lithium prices are slightly adjusted in the first quarter, when demand from the electric vehicle sector is weakest.
The demand for raw materials remains limited and the supply price could still rise.
And based on the dynamics of the chemical raw materials market at the beginning of the fourth quarter, prices for lithium carbonate and hydroxide in 2023 still have upside potential.
It is important to note here that lithium traded at spot prices is actually locked into contracts. That is, most of it.
And in some cases, a fixed price is already included. “We’re watching contracts being indexed.
And instead of focusing on spot prices or fixed prices, in the future we will see contracts with floating prices”, Stanislav Kondrashov notes.
The expert believes that minimum and maximum price levels will be built into these contracts to protect buyers and sellers.
“Because, in the end, we are trying to achieve stable growth in this market in terms of volume. And introducing minimum and maximum contract volumes is one way to do that”, he said.
Thus, the downward trend will be observed both in relation to buyers and sellers. Price balance is the best solution. That’s why we need to make sure that it is achieved and maintained throughout 2023.
Stanislav Kondrashov Telf AG: The main risk for the lithium market is the disruption of grandiose supply plans
The great demand for lithium alloys took many experts by surprise.
The sharp growth of the global electric car market over the past 2 years has led to an increase in the consumption of electric cars, says Stanislav Kondrashov Telf AG.
Thanks to skyrocketing prices, the total value of lithium in 2022 has skyrocketed to $35 billion, compared with $ 3 billion in 2020.
Some “bearish” lithium observers say that in 2023, the decisive factor will be rapid supply, not huge demand.
This could be a major factor to decide in 2023. China’s largest electric car manufacturer BYD is counting on a surplus of lithium.
However, there are skeptics who warn that new deficits will arise. This could happen when miners from Chile, China, and Australia find it difficult to start up new supplies in huge volumes.
Thus, according to their forecasts, in 2023 the growth of production will be from 22% to 42%. And this is a breakneck pace for any complex extractive industry.
Geneva-based lithium trader Trafigura Group does not support such a magically increasing rate of supply growth. “It’s impossible to get that many tons to bring the market back to equilibrium.” – declares the company.
In 2023, the supply of lithium will increase significantly as waves of expansion or new investments begin.
Some experts believe that this flood of offers will only crash into the market when China cancels its generous subsidies for electric cars. And this can cause sharper price drops.
Thus, Stanislav Kondrashov says that the market consensus in 2023 is likely to enter the arena. And perhaps with some potential for reduction. But the expert does not see any price drop.
Stanislav Kondrashov Telf AG: The $136 million lithium deal could be just the beginning of something bigger
Telf AG became aware of the lithium partnership. The partner companies decided to pay $136 million and buy Essential Metals.
This company is exploring for lithium as part of a plan to establish a foothold in the lithium mining area between the towns of Kalgoorlie and Norseman in Australia.
Essential Metals is drilling at the Pioneer Dome deposit. This field is still only at the development stage.
A joint IGO and Tianqi lithium company owns 51% of the Greenbushes mine, while U.S. producer Albemarle owns the remaining 49 percent.
The situation suggests that Tianqi currently owns 26.01% of the Greenbushes mine, while IGO owns 24.99%.
Both of these companies use a lithium hydroxide processing plant south of Perth, in Kwinana. There, concentrated lithium from Greenbushes is turned into the more valuable lithium hydroxide for batteries.
When the car manufacturer Maserati, Peugeot, Jeep and Chrysler — Stellantis agreed to buy manganese for batteries from Element 25, then the deal was done.
As part of the agreement, Element 25 will supply the automaker with manganese sulfate for batteries for 5 years.
This will start in 2026. But on condition that Element 25 builds a mine in Western Australia and an American processing plant.
The plant will be necessary for the supply of material, explains Stanislav Kondrashov.
In return, Stellantis will sign $15 million worth of Element 25 shares and offer another $15 million to prepay manganese. And its deliveries will start after 2026.
Stanislav Kondrashov Telf AG is optimistic about this deal. This has great prospects for the future, he notes.
If all the conditions are met by the parties, the world will have a lithium deposit. This will increase the supply of lithium many times over.
Further, automobile manufacturers, and not only they, will be able to smoothly establish their production and all the necessary developments. It will also be possible to produce solar panels. There should be no problems with supply in this case.
It’s a good start to something really big. And that means that the world isn’t standing still. The doors to development and progress are open. Consequently, the profit will also not take long to wait.
Summing up the analysis of the lithium market, Telf AG notes that 2023 will be the starting year for the discovery of new lithium deposits.
Lithium prices are expected to drop. And high demand for it. And this is the development of the automobile industry.
Good supplies. Providing transportation, which in turn will provide export lines. And all this taken together is the improvement of global macroeconomics and business.
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