We're analyzing the lithium market and how things are projected to pan out in 2022, outlining influencing factors and variables that may affect the market.
Lithium's 2021 Performance
The price of lithium was projected to rise in 2021, and it did just that. In fact, prices rose beyond what some were expecting.
Lithium & Electric Vehicles
With the price increase, producers of lithium still saw solid profits, indicating growth and positive interest in the lithium market. A large reason for this was the continued curiosity and adoption of electric vehicles.
Moreover, many producers underwent mergers and acquisitions in an effort to get in front of the supply side of lithium.
The unexpected growth in the lithium market continued through to the end of 2021 with rising prices and an increase in investments in the lithium sector¹.
Lithium's 2022 Outlook
In 2022, it's looking like the electric vehicle market will be a big factor in how the lithium market unfolds. Alongside electric vehicles, the general push for decarbonization and sustainable energy practices will also guide the lithium market to see prices and interest increase from producers, investors, and consumers.
Skyrocketing Spodumene Prices
Throughout 2021, the price of spodumene saw record highs due to the short supply of lithium. While the price of lithium was expected to increase, the dramatic upward trend in spodumene prices shocked those who were watching the market.
Some experts agree that these extremely high spodumene prices might not be helpful to the lithium industry in the long-term, the tight supply of lithium will keep these prices elevated for at least the first part of 2022².
Lithium Market Growth
The lithium market is queued up for continual growth through 2022 for a number of reasons.
First, if electric vehicle production continues to expand into different styles and models of vehicles, this will drive the electric vehicle (and lithium) demand up as consumers have choices when it comes to purchasing an electric vehicle.
Also, consider the economic effects of electric vehicle adoption in the commercial sector on the lithium market - think whole fleets of internal-combustible engines replaced by electric vehicles.
Second, with the merger and acquisitions we saw in lithium sector throughout 2021, experts forecast some relief to the supply-side pressure of the lithium industry, however, lithium supply will most likely still see a deficit in 2022.
Because of this, the price of lithium is forecasted to follow the same trajectory from 2021, little to no decrease in pricing.
Lithium: What to Expect in 2022
Moving forward, we'll likely see many partnerships formed in the lithium market this year, which could translate to a more secure lithium supply chain.
This year will also likely see new lithium mining projects begin as well as significant progress in operations already under way. The focus and opportunity here lies in the supply side of the lithium market.
Investing In Lithium
Many investors have already capitalized on the opportunity to invest in lithium products and investors with the promising outlook of the lithium industry.
Direct Lithium Extraction
The Godfather of Lithium, Dr. John Burba of IBAT, has created a method for extracting commercial-grade lithium from brines responsibly, which satisfies many of the unmet needs the lithium extraction industry is facing today.
One of the main concerns about traditional lithium extraction from brines is the pollution and environmental impact is has, which can be mitigated with the implementation of Direct Lithium Extraction while still being economically superior to traditional lithium extraction methods.
Direct Lithium Extraction is a sustainable, economically feasible, and efficient process which uses Dr. Burba's patented engineering concept to extract high recovery rates of lithium while rejecting impurities and preserving the groundwater supply for local residents (who rely on this source of water).
On top of all these advantages, Direct Lithium Extraction also has the ability to bring lithium to market faster, because it doesn't rely on the traditional evaporation methods which could take over a year.
Combine that with the fact that Direct Lithium Extraction, utilizing a mobile plant design, is up and running before traditional plants would be able to, and you can see how Direct Lithium Extraction holds the key to the supply-side issues facing the lithium extraction industry today.
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