Lithium prices have seen a huge surge over the past two years, and they won’t be slowing down anytime soon.

You’re probably wondering what’s behind this rise… It’s because the demand for lithium is increasing while supplies of the metal are decreasing. It’s really that simple.

Without a doubt, this surge will continue into the next decade. The global lithium market is expected to grow at a CAGR of 8.07% between 2017–2021.

UBS Securities released a report last month that says lithium prices are expected to stay high — above $8,500 per ton until 2024.

There are a few factors that are driving the lithium supplies, and one’s the need for lithium-ion batteries.

You’re probably aware that lithium-ion batteries have been making their way into our lives by becoming necessary parts of powering our homes, cars, and smartphones.

The increased demand for these batteries is behind the growth in the lithium market.

Lithium-ion batteries are used for powering grid-connected storage devices. These devices have the capacity to store an effective amount of power, and that power can be stored and then supplied to the grid during peak hours.

This would be ideal for solar and wind energy — the energy that’s retrieved from these sources now has the possibility of being stored using grid-connected storages. No energy is lost, and it can be used at times when there might be no sun or wind available to convert into energy.

What’s really great about lithium-ion batteries is that they are environment-friendly alternatives.

And this explains why governments throughout Europe and in China are setting up incentives for citizens to encourage them to buy electrical vehicles (EV) instead of vehicles powered by gasoline.

EVs are powered by lithium-ion batteries and because of that, they play a huge role in reducing carbon emissions and demands for oil.

Right now, EVs are a little more expensive than gasoline-powered cars, but the price of EVs have started becoming more affordable and could be going down…

UBS Securities reports that falling battery costs, along with improvements to battery capacity and performance, have been driving EV sales.

Last but definitely not least, lithium-ion batteries are used for powering our smartphones. We’re living in a world where we always have our phones on us, and if we don’t, we feel lost.

Staying connected is very important to us, which is why when you’re looking for a new phone, a big concern is the phone’s battery life.

You want your phone to stay powered all day so you don’t miss a single interaction, which is why lithium-ion batteries are constantly improving and becoming more efficient.

Lithium-ion batteries have been the go-to power source for powering all our electronic devices, and that won’t be ending time soon. They hold a lot of power, and that makes them a reliable component for all devices and for us.

By now, you’re probably aware that the demand lithium for is very high. Demand will keep on rising because it powers our everyday lives and the devices that we use. And that’s not about to end anytime soon.

There’s no denying how versatile this metal is.

There’s also no denying that the actual physical supply of lithium is decreasing — making it a highly desired commodity.

This year is the year to invest in lithium — to start investing in companies that are going to be the driving forces behind EVs and energy storage. And investing in companies like Albemarle (NYSE: ALB) will only benefit you in the long term.

Until next time,

Jennifer Clark
Pro Trader Today