Pedro Palandrani, Director of Research for Global X ETFs, joined Keith Black, Managing Director of RIA Channel, to discuss the growing demand for lithium.
The world is moving towards decarbonizing the transportation sector, with electric vehicles playing a key role. There is no way to achieve an electric future without accessing lithium. Lithium is the world’s lightest metal and is widely used in lithium-ion batteries. While other critical materials include copper, uranium, and nickel, lithium is the common denominator across all battery technologies. Batteries are required for various uses, with most of the current demand coming from electric vehicles and energy storage.
Currently, the majority of lithium is sourced from South America and Australia. The lithium triangle of Chile, Argentina, and Bolivia uses brine extraction to produce lithium, while Australia uses hard rock extraction methods. Once the lithium is mined, 80% of global processing occurs in China.
Palandrani predicts that the US will become increasingly important in lithium production, growing far beyond its current 1% share. Policy initiatives in the Inflation Reduction Act support a greater US lithium supply, while the Department of Energy provides grants to lithium miners starting US operations.
Lithium miners are encountering favorable supply/demand dynamics, with prices likely rising during times of constrained supply. Lithium supply is inelastic, as it takes several years to bring new capacity to the market. While supply is constrained, demand is growing from 1 million metric tons in 2023 to over 3 million metric tons by the end of the decade. Approximately 90% of the incremental demand for lithium comes from electric vehicles, which are expected to grow from 14 million units sold globally in 2023 to 18 million this year.
WEBCAST – Lithium Leaders: A CEO Roundtable On Market Trends and the Future of the Industry
Join Global X ETFs for an upcoming discussion featuring the CEOs from Standard Lithium, Lithium Americas, and Piedmont Lithium, pioneers at the forefront of lithium exploration and development in the U.S.
Agenda:
- Distinguishing Mining Techniques
- Addressing Exponential Demand
- Navigating Price Dynamics
- The U.S. Policy Landscape
Accepted for 2 CFP® / IWI / CFA CE Credits