The world could be facing a shortage of lithium as demand for this metallic resource continues to rise, with some analysts predicting it could happen as soon as around 2025. Others, however, see a longer timeframe before this shortage materializes.

BMI, the research unit of Fitch Solutions, was among those forecasting a shortage of lithium supply by 2025. In a recently published report, BMI largely attributed the shortage to China’s demand for lithium outpacing its supply.

“We expect China’s average annual lithium demand growth for electric vehicles alone to reach 20.4% between 2023 and 2032,” the report stated.

In contrast, lithium supplies from China are projected to increase by only 6% during the same period, according to BMI, adding that this growth cannot satisfy even a third of the anticipated demand.

China is the world’s third-largest lithium producer and an integral component of electric vehicle batteries.

The world produced 540,000 metric tons of lithium in 2021, and by 2030, the World Economic Forum estimates global demand to exceed 3 million metric tons.

According to forecasts by S&P Global Commodity Insights, electric vehicle sales are set to reach 13.8 million in 2023, but they are then expected to surge to over 30 million by 2030.

“We believe in a substantial deficit in the lithium industry. We do anticipate supply growth, but demand is expected to increase at a much faster pace,” stated Corinne Blanchard, Director of Lithium and Clean Technology Research at Deutsche Bank.

By the end of 2025, Blanchard envisions a “modest deficit” of around 40,000 to 60,000 tons of lithium carbonate equivalent, but she predicts a broader deficit reaching 768,000 tons by the end of 2030.

Source: CNBC.com