((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto)) by Ernest Scheyder
The world’s largest lithium producers told a major industry conference this week that they remained optimistic about long-term demand for the metal used in electric vehicle batteries, despite a recent price slump that has forced to layoffs and reduced expansions.
Once a niche metal used primarily in ceramics and pharmaceuticals, demand for lithium has grown rapidly over the past decade. But China’s oversupply and slowing aggressive electric vehicle adoption rates have caused lithium prices to fall more than 80% over the past year.
The mood at the Fastmarkets Lithium Supply and Battery Raw Materials conference in Las Vegas, the world’s largest, reflected attendees’ cautious hope that the industry can meet the surge in demand expected later this decade as electric vehicles and battery storage technologies gain popularity.
The conference welcomed around 1,100 participants, the same number as last year and almost triple that of 2019, according to organizers.
“We’re really focused on the fundamentals of the underlying business,” said Patrick Howarth, head of Exxon’s lithium division, which announced at the conference that it would expand its lithium production plans in the ‘Arkansas. “We are not afraid of low prices, and we are not attracted by high prices
Fastmarkets data shows, for example, that lithium demand in the US will grow by 29% each year through 2030, with increases also expected in the rest of the world.
“Critical minerals are the oil and gas of our energy future,” Ashley Zumwalt-Forbes, the U.S. Department of Energy’s deputy director for batteries and critical materials, said at the conference.
Zumwalt-Forbes oversees a U.S. government grant program for the critical minerals supply chain and said she looks forward to seeing more lithium companies apply for funding.
The demand projections helped offset the somber mood that permeated the industry in recent months following layoffs at Lake Resources LKE.AX , Albemarle ALB.N and others.
“For those of us worried about market sentiments right now, keep an eye on the long-term trajectory,” said Dale Henderson, chief executive of Australian lithium miner Pilbara Minerals PLS.AX .
Global lithium supply stood at more than 1 million metric tons last year, according to Fastmarkets data, a figure that is expected to more than double by 2026, largely driven by expansions in Africa, China and Australia. Yet producers have warned that unless prices rise, that supply is unlikely to be forthcoming.
“We’re going to be measured and judged on how we respond to prices and how we supply the market,” said Sarah Maryssael, chief strategy officer at Arcadium Lithium ALTM.N , which has development projects around the world.
Albemarle, the world’s largest lithium producer, began the conference with a stark warning about “concerning” lithium prices, but then laid out a plan to auction off its reserves of the metal to the highest bidder and struck an optimistic tone about demand later in the decade.
“I’m not worried about demand,” said Eric Norris, director of Albemarle’s energy storage business. “Ideally the demand would be in the United States, but if that is not the case, there is no doubt that there will be demand elsewhere
