Copied from EMH board...24 May 2019 09:03
Global Lithium president Joe Lowry told Paydirt's Latin America Down Under Conference in Perth yesterday that the lithium market was in its infancy.
"It's a tiny market by pretty much any standard," he said.
"It only reached US$1 billion in 2015."
There's still only seven lithium producers, though there are about 350 juniors - many on the ASX - with lithium in their names.
Lowry said the market was in a "very confused state" since a gloomy February 2018 Morgan Stanley report that tipped a slump price due to oversupply.
"It made it very, very difficult for juniors to get financing," he said.
"If I believed their supply and demand numbers I'd say the price is going to hell."
Lowry said oversupply of lithium was a myth.
Lithium demand was 270,000 tonnes last year.
"We're pretty much going to 1 million tonnes in 2025," Lowry said.
"And my numbers are some of the lower numbers."
Lithium production will struggle to keep up with demand, according to Lowry, due to underinvestment and the difficulty in starting up new projects.
Lowry believes the lithium market needs at least $12 billion in investment in the next five years to meet demand.
"This requirement is exacerbated further by known and emerging failures in lithium start-ups which have demonstrated a lack of necessary skillsets - high profile failures that have discouraged sector investment," he said.
"There will not be any significant lithium chemical oversupply anytime soon. While there have been many optimistic supply forecasts, recent results speak for themselves."
There has been much debate about South American brine production versus Western Australia's hard rock production.
"The world needs all the lithium it can get, whether it be hard rock or brine," Lowry said.
"There shouldn't be any us versus them because the world needs them both.
"South America can win, WA can win - let's all be friends."
However, he warned that not all lithium was created equal and tier one battery producers required tier one lithium.
"Lithium has an equality problem that has to be solved with technology," he said.
While lithium pricing has weakened since "panic pricing" in 2016, it would find its new normal.
"The natural new normal should be $12,000-14,000 which is kind of where it's settling now," Lowry said.
"I do not see a price crash. It's all good - lithium's got a bright future."
Lowry noted lithium equities were depressed.
"If you're interested in lithium, now's a good time to get in," he said.
"We've just got started with demand."
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