The coming Lithium Rush

Bloomberg Business Week looks into the growing Lithium mining business:

Banks and consultants such as Deutsche Bank and Macquarie Research are near-unanimous in the belief that the next several years will see an increase of 60 percent to 250 percent in demand for lithium—and that it will sell for 50 percent or more above historical levels. The rise in demand will be driven by batteries for electric vehicles and energy storage for wind and solar plants. UBS Group estimates that electric cars will account for 9.2 percent of global light vehicle sales by 2025, up from only 1 percent today, while analysts at Goldman Sachs Group Inc. have suggested that the market for lithium in energy storage could eventually be bigger than in all other products combined.

Already, the four companies that in 2015 provided 88 percent of the world’s lithium can’t keep up: Lithium contract prices have increased from $4,000 per metric ton in 2014 to as high as $20,000 today.

Commodities, of course, are always a bit of a gamble. But is there anyone who seriously doubts that that market will expand quite dramatically? The price development gives a good indication of where the journey is going. Propping up coal and petrol might give short-term economic relieve, but financial markets seem to make up their mind where the future is headed.