Years of rock bottom lithium prices caused many mining companies to curb expansion projects. Producers are now struggling to keep up with booming demand and lithium prices soaring.
Battery manufacturers are feeling the crunch. Over the past year, demand for battery-grade lithium from the automotive sector has driven prices to record highs with little short-term relief in sight.
Lithium prices skyrocketed an astonishing 496% in 2021, with momentum showing no sign of slowing down. Prices have increased 78% year-to-date, jumping 10% in the last two weeks alone. At the time of writing, spot lithium carbonate was sitting at approximately US $78,200 a tonne.
Battery supply chain researcher Battery Mineral Intelligence predicts limited supply and mounting demand will continue to put pressure on lithium prices over the coming months, saying:
“Robust demand for material, and hence high prices, will be sustained in the near-term, with expectations that the seasonal recommencement of supply from domestic Qinghai brines in the coming months will provide little relief to the growing market deficit.”
The question on everyone’s mind: how long can lithium prices sustain this momentum? Lithium prices have increased six-fold year-over-year, but how long can lithium continue to rally?
A recent article in the Wall Street Journal highlights current supply deficits as the driving force behind climbing lithium price, saying:
“Lithium prices are rising at their fastest pace in years, setting off a race to secure supplies and fueling worries about long-term shortages of a vital ingredient in the rechargeable batteries that power everything from electric vehicles to smartphones.”
Analysts at Citigroup raised their forecast for battery grade lithium to US$60K per tonne and predicted higher lithium prices are here to stay. The investment bank says it sees limited potential for downward price movement over the coming year, commenting that “higher frequency quarterly balances point to a rebalancing in the market only by H2 2023.”
Clearly, there are winners and losers in the face of soaring lithium prices, and lithium companies are among those reaping the rewards.
Several big-name mining companies have seen stock prices surge on intensifying lithium demand while others work to expand production capacity as quickly as possible.
China Dongsheng Inc (OTCPK: CDSG) recently announced that it has entered into an agreement with Nevada-based American Lithium Minerals Inc., granting CDSG the right to earn up to a 60% interest in the West End Lithium Project, located near Tonopah, Nevada.
Vancouver-based Lithium Americas Corp (NYSE: LAC; TSX: LAC) is also eyeing resources in Nevada. The Company recently secured key state-level permits for the Thacker Pass lithium project in Humboldt County, Nevada.
American Lithium Corp. (OTCQB: LIACF; TSX-V: LI), another Vancouver headquartered mineral exploration company, recently announced positive results of uranium leach testing on deposits taken from its Macusani Uranium Project in southeastern Peru. Testing work was completed at the Australian Nuclear Science and Technology Organization (ANSTO Minerals) and TECMMINE Mineral Processing Consultants.
On February 23, 2022, Standard Lithium Ltd. (NYSE: SLI,TSX-V: SLI) reached an agreement with strategic partner LANXESS Corp. to expedite plans for the development of the first commercial lithium project in Arkansas.
Albemarle Corporation (NYSE: ALB), a US-based specialty chemical manufacturer, recently announced its subsidiary, Albemarle Lithium UK Limited, has entered into a definitive agreement to acquire all outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd.
But it isn’t only big-name lithium companies making big moves; many smaller players are equally primed for breakout opportunities.
United Lithium Corp. (CSE: ULTH; OTC: ULTHF; FWB: 0ULA) is a Canadian exploration and development company focused on driving shareholder value and powering global energy demand through the exploration and development of lithium resources in favourable districts.
The Company’s flagship projects are in politically safe and well-situated areas of Finland and Sweden, giving ULTH convenient access to major infrastructure channels and supporting cost-effective development and production opportunities.
Investor Highlights:
Recent Updates:
On February 14, 2022, United Lithium Corp. completed the acquisition of 83.6% of the Kietyönmäki Lithium Project in Finland. Previous drilling at the property intersected lithium deposits.
The acquisition was completed with Sunstone Metals Limited, the Company responsible for historic drilling on the site, Scandian Metal Pty Ltd., Scandian Metals AB, and Litiumlöydös Oy. It involved the purchase of 83.6% of the issued and outstanding share capital of Litiumlöydös, which holds a 100% interest in and to the mining licenses comprising the Kietyönmäki Lithium Project.
Later that week, on February 17, ULTH announced that it would be deploying a second rig to drill at the Bergby Lithium Project in Sweden. Doubling drilling capacity will help accelerate the project and enable new targets to be tested sooner. The Company is also looking to add a third drill to the project, one capable of maneuvering challenging terrain with minimal environmental impact.
Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.
