VIDEO - Daniel Jimenez, iLi Markets: Lithium Prices Unlikely to Fall from Current Level

The lithium space has been gathering interest from diverse investors over the past few months as electric vehicle demand continues to increase.

Prices have performed better than many analysts expected at the end of 2020, a year that was marked by the coronavirus pandemic but also saw battery metals markets take an upward turn.

“The truth is that we were coming from a very depressed (lithium) market, and there was this sensation of overproduction and a lot of idle capacity,” said Daniel Jimenez of iLi Markets. “But this sudden turnaround, which one was expecting at one point in time and fairly soon, actually was a lot quicker.”

He told the Investing News Network that the industry could continue to see prices stay at these levels in 2021, and is predicting another bright quarter for lithium.

“I think we have entered a phase, a cycle in lithium where demand growth has been so strong that it will be difficult all the way through for supply to maintain that growth rate,” Jimenez said. “And for that reason, I believe that it is very unlikely that prices will eventually go down again, at least in the near horizon of the next three to five years.”

Lithium producers made news headlines in Q1, with the recent Orocobre (TSX:ORL,ASX:ORE) and Galaxy Resources (ASX:GXY,OTC Pink:GALXF) proposed merger bringing different reactions in the lithium space.

Jimenez, who worked at top lithium producer SQM (NYSE:SQM) for 28 years, shared his thoughts on the deal, saying it is an interesting move.

“I think that the move is a move which acknowledges one thing, and that is that in the future the lithium feedstock will be the bottleneck in the production of lithium chemicals,” he said. “It will not be the refining, it will most likely be the feedstock.”

Watch the video above for more of Jimenez thoughts on lithium prices, mergers and acquisitions and what could be in store for the space.

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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.