Global lithium shortages: Supply and demand imbalance - Part 1

Keep track of trends thematically with Auquan's Portfolio Activity Monitor: Goldman Sachs lithium forecasts, insufficient investment in lithium mining and increasing downstream demand for EV factories and battery plants.

Global lithium shortages: Supply and demand imbalance - Part 1

A critical challenge for global EV adoption is the shortages of metals required to produce EV batteries. Lithium, cobalt and nickel mines haven't been able to expand as quickly enough to keep up with the surging demand for EVs. Consequently, metal prices, especially lithium, have skyrocketed - lithium prices have risen 13-fold over the past two years.

This insufficient lithium supply threatens to escalate the battery and EV costs, and the costs of devices that use lithium-ion batteries such as laptops and mobile phones.

The recent Goldman Sachs research 'Battery Metals Watch: The end of the beginning' published May 29 spiked a growing debate around the availability of supply and demand of lithium.

In this article, we will highlight Goldman Sachs' lithium predictions and how Auquan can help you keep track of this trend thematically.

What did Goldman Sachs say?

Lithium galore. (Source)

Goldman Sachs' research argued that the lithium market is expected to 'pivot towards a prolonged phase of surplus starting this year', meaning that there will be an oversupply of lithium and thus a fall in lithium prices as forecasted below.


Despite the world producing 11% less lithium than it needed last year, Goldman claims that newly-built mines will produce 23% more lithium than carmakers and other businesses can use, with “significant” new lithium supply coming from China.

However, several sources, most cited being Benchmark Mineral Intelligence, have disagreed with Goldman Sachs' forecasts and said that a lithium oversupply is quite unlikely.

How can Auquan help you to keep track of this topic?


Over a month ago, Auquan flagged how the market has potentially underestimated the lithium supply/demand imbalance. Lithium-ion battery and EV manufacturers supply chains' are exposed to raw material shortages, with the outlook set to worsen as investments in downstream EV factories and battery plants are outstripping investments in upstream lithium mining.

Auquan helps you track this trend thematically on its Portfolio Activity Monitor (PAM) through aggregating stories such as below;

Lithium demand-supply imbalance debate

Goldman Sachs' headquarters in New York. (Source)

Lack of upstream lithium mining investments

Secretary of State Jose Fernandez (right). Credit: OECD. (Source)

Downstream demand is outstripping upstream supply

A BMW iX EVis seen displayed at the BMW booth during a media day for the Auto Shanghai show in Shanghai. Reuters/Aly Song

BMW starting electric car production in the Lydia plant, BMW's third car assembly facility in China, is just one example that indicates that investments in downstream EV factories and battery plants are outstripping investments in upstream lithium mining.

Lithium supply chain issues

'The photograph on the mining conglomerate’s social media account showed 70 ethnic Uyghur workers standing at attention under the flag of the People’s Republic of China. Qilai Shen/Bloomberg'

In the next piece for this analysis, we'll look at in depth research points on how Goldman may have got their lithium pricing prediction wrong.

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