Battery Metals
January 19, 2023

What does the future of lithium demand look like?

According to Trafigura, this rising demand will result in an increase of 250 000 tonnes per year through 2025.

It's worth noting that the production of a single electric vehicle requires 33Kg of lithium chemicals. As the world transitions from black coal energy to greener energy, it becomes clear that the growth of lithium is unavoidable. According to Trafigura, this rising demand will result in an increase of 250 000 tonnes per year through 2025.

However, it is not all rosy ahead; there are some concerns to be aware of. For starters, these supply shocks may push lithium prices too high for automakers to access and they can shift to another alternative. Second, it should be noted that for every tonne of lithium extracted from minerals, 15 tonnes of carbon dioxide are released into the atmosphere. Nevertheless, businesses are also attempting to mitigate this issue by investing in alternative technology to extract the minerals, such as new mines in Europe that extract lithium from geothermal waters, which have a much smaller environmental impact than open-pit mining and brine extraction. Ken Hoffman, cohead of EV battery material research at McKinsey, believes that new extraction and mining technologies will significantly increase global supply.

After all is said and done, it is clear that the lithium market is on a path of exponential growth, and traders are preparing to capitalise on it. I would advise you to start with large lithium mining companies to capitalise on the growing trend. Many experts believe that lithium has entered a super cycle, in which demand will outpace supply. We will have to wait and see what happens.