Investing.com — In a research note this week, Bernstein analysts highlighted that 2030 is a pivotal year for the lithium market, indicating that significant changes could disrupt the sector as global demand for electric vehicles (EVs) skyrockets.
This year is expected to be a turning point, with forecasts suggesting that “global sales of electric vehicles will exceed 50%,” creating a crucial barrier to adoption.
Several major events are expected to shape the lithium landscape by 2030.
Bernstein notes, “It marks the year when recycling will break the 1% mark,” a milestone that, while trivial, will provide insight into supply chain dynamics.
Moreover, major players such as ExxonMobil (NYSE:) plan to sell ‘1 million EVs worth 1 million euros’ [of] lithium,” which will impact the cost structure of lithium extraction from oil field brine.
The note emphasizes that crucial developments will take place in the relationship between supply and demand for lithium by 2030.
Currently, the sector is experiencing a ‘care and maintenance economy’, with significant supply capacity locked up and clearer price signals awaited.
Bernstein suggests that “prices carry a lot of downside risk from here on out,” predicting a moderate recovery to around $13-15/kg, where they were at the beginning of the year.
Bernstein expects marginal cash costs to drive pricing between now and 2030, with occasional spikes toward EBITDA margins mid-cycle.
They underline the importance of the Chilean royalty regime in shaping this price environment. The company advises against exposure to lithium market volatility for all but long-term investors, warning that the sector may not see a boom cycle before 2030.
