Why the First Quarter of 2021 Has Been Promising for Lithium Market
FinancialNewsMedia.com News Commentary
PALM BEACH, Fla., April 27, 2021 /PRNewswire/ -- The first few months of the year have been bright for the lithium market, with interest in battery metals increasing as electric vehicles (EVs) take over news headlines around the world. Despite the volatility brought by the coronavirus pandemic to every market, lithium has shown resilience and prices performed on an uptrend during the first quarter. At the end of last year, the trend of declining lithium prices seemed to be coming to an end, with analysts predicting a better price environment ahead. When the year kicked off, Benchmark Mineral Intelligence was already expecting the lithium market to come into tightness in 2021. They said: "But the speed of price increases in Q1 2021 was beyond expectation, with prices for lithium carbonate having nearly doubled in price since the beginning of the year," George Miller told the Investing News Network (INN). "Furthermore, shortages and sold out order books in Q1 were a stark change from Q4 2020, where lithium chemicals were freely available to consumers at lower prices." Active mining stocks in the markets this week include: Lithium South Development Corporation (OTCQB: LISMF) (TSX-V: LIS), Lithium Americas Corp. (NYSE: LAC) (TSX: LAC), Piedmont Lithium Limited (NASDAQ: PLL), Albemarle Corporation (NYSE: ALB), Livent Corporation (NYSE: LTHM).
Commenting on how prices performed in Q1, William Adams of Fastmarkets said he was expecting a bullish outcome on the back of strong demand and restocking. "But the extent of the buying and suddenness of the emergence of tightness was a surprise," he explained to INN. "It soon became apparent that a lot of the surplus that had built up in 2020 has been bought up and stockpiled by a few large users, and that the idle capacity was not ready to restart in a timely manner for various reasons." CRU Group also saw spot prices continue to move higher as expected through Q1. "EV sales across the key regions in Q1 have actually exceeded our already bullish expectations," James Jeary told INN. "On the supply side, there's been plenty of development of projects in preparation for future supply growth, which is unsurprising."
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