In our EGS and Climate report yesterday - Lithium – A “Special” Commodity For Now – Adding To Inflation – we talked about the current spike in lithium pricing but at the same time talked about the likelihood of lithium moving from famine to feast over the next few years and the potential for significant price volatility. This is a product for which demand growth is very high but supply growth is also very high. There are also some very divergent views of supply-demand and we highlighted a view that was bearish for lithium in yesterday's piece and show a bullish one below. The automakers and battery makers want to promote the idea that lithium will remain in short supply, as they need to encourage as much investment in lithium production as possible. While the incumbents want to keep pace with growing customer demand, they would like to see fewer new plays and are naturally conflicted in what message they want to give. We foresee supply and demand falling in and out of balance several times over the next 10+ years.
