Short-term Lithium Oversupply Issues Creating Long-term Opportunity

PALM BEACH, Florida, May 21, 2020 /PRNewswire/ — At the moment, lithium prices are slumping on oversupply concerns. So much so, companies like Albemarle have delayed construction plans for nearly 125,000 tons of additional capacity, as noted by Reuters. However, cuts to supply could eventually lead to a supply crunch. With lithium prices being pulled lower, new lithium projects have either been delayed or halted, which could eventually create the potential for tight supply with sizable demand. In fact, ‘Benchmark Minerals forecasts lithium demand to reach 2.2m tonnes by 2030 but as things stand lithium supply (LCE) is only set to reach 1.67m leaving a huge structural deficit. This demand will be driven by growing EV adoption through the 2020s, with Benchmark Minerals forecasting an EV penetration rate of 4.3% in 2020 rising to 30.7% in 2030.’ That alone could lead to higher lithium prices moving forward. That will create big opportunity for companies such as American Lithium Corp. (OTCQB:LIACF) (TSX-V:LI), Tesla Inc. (NASDAQ:TSLA), Albemarle Corporation (NYSE:ALB), Sociedad Quimica y Minera de Chile S.A. (NYSE:SQM), and Lithium Americas Corporation (NYSE:LAC)(TSX:LAC).