While producers are looking to increase lithium output to meet rising demand, that does not mean all the projects will come online in a timely fashion. Nor does it mean producers are assured of tapping high-grade lithium.
“Lithium operations, particularly brine, can be difficult to bring online and require expertise and a significant learning curve to operate effectively,” said Fitch. “Delays in project timing are not uncommon, even among top producers, and plants can take years to fully ramp up once construction is completed.”
The potential for supply shortages comes against a backdrop of robust demand expectations and those expectations are in place for a multi-year period.
“Leading industry analysts project lithium demand to remain robust through the next several years as a result of the continued adoption of EV, with CRU projecting lithium demand to grow at a 12% CAGR through 2023 to 484kt,” according to Fitch.
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