U.S Market Strengthens on a Tight Supply of Lithium-Ion Battery Raw Material
- Journalist: Robert Hume
The Conference of Parties (COP 26) was held in Glasgow from 31st October to 12th November 2021. In which numerous national delegates and party leaders along with bureaucrats participated to discuss the concerns regarding the rising global mean temperature and climate change. After a tough round of negotiations and compromise, the global leaders concluded to take climate change as a major concern and decided on numerous points to stop the rising mean temperature of the blue planet.
The major focus was the ramp-up transition towards a greener economy besides reduced dependence on the oil and gas economy. In which the shift in the utilization of Electric Vehicles (EV’s) rather than the Internal Combustion Vehicles (ICV’s) is the major focal point. In response, soon after that, the Lithium market observed that the demand outlook exceeded the supply capabilities by a huge margin as the investment towards a greener economy took a major leap and the major conglomerates and players in the energy sector also increased the investment in anticipation of better netbacks and capture the market share in the upcoming period. Currently, in the US 13 different Gigafactories for Lithium-based battery manufacturing are under construction and the US EIA stated that if none of the previously running factories shutdowns regards any mishaps the utility-scale battery power storage power could exceed 2500 MW by 2023.
This paced-up transition brought fresh challenges to the market as the sudden transition towards the EV’s the demand for Lithium-ion batteries had been skyrocketed since the mid of the fourth quarter of 2021. The downstream players were raced to ensure the long-term supply. However, due to the vast supply-demand gap, the prices of raw materials of Lithium-Ion batteries surpassed the projected growth margin ranging between 28-42% higher.
As per ChemAnalyst, the EV sector is likely to witness a double-digit growth in 2022 which proportionally supported the will of Lithium-ion batteries producers to make constant efforts to ensure the long supply of Lithium. In response, the raw material prices are likely to witness a persistent hike in the producers offers in the upcoming period.