Lithium oversupply could lead to shortage
The specialist, a former director at Albemarle Corp, discussed how an array of factors have contributed to a steep decrease in demand for lithium chemicals before noting what stood out to him in Albemarle’s Q2 2020 earnings report and why.
The Interview also discussed the company’s plan to restart idle operations early next year. “My gut feel for that plant in Kings Mountain is it will never come back up,” the expert said. “To bring a brine operation online on spec, and then keep it at its maximum run rate, is a good six- to nine-month process.”
He also shared his views on the likelihood of a lithium shortage in the next year or two if the economy picks up and COVID-19 disruption settles. There could be a shortage at some point in 2021, but “definitely early 2022, I think there will be a shortage and price spike”.
Another area explored was whether there is any “tangible threat” from alternatives to lithium-ion batteries. This is more likely to happen across grid energy storage rather than transportation, according to the Interview. “The only threat is how much lithium is needed in a battery.”
Other topics covered included the competitive landscape, direct lithium extraction processes and related challenges, and the trends relating to Albemarle that investors should track in the short term.
To access all the human insights from Third Bridge Forum’s Albemarle Corp – idled production & 2020 headwinds Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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