Senior Analyst at Benchmark Mineral Intelligence Jose Hofer recently shared his thoughts on the lithium space with INN.
Speaking with the Investing News Network, Senior Analyst at Benchmark Mineral Intelligence Jose Hofer shared his thoughts on the lithium space and what’s ahead for the key battery metal.
In 2019, Hofer said most market participants agree that growth has been below expectations.
“We are forecasting a total demand of 340,000 to 350,000 metric tonnes (this year) compared to around 270,000 last year,” he said. That represents growth of almost 20 percent, but it is lower than what the market saw in the 2017 to 2018 period.
According to Hofer, one of the big surprises in the market has been slower-than-expected demand for lithium hydroxide.
“Most growth did not come from China as it was expected,” he said. “Some of the new conversion capacity placed in China has been experiencing a slow ramp up and slow production.”
For the analyst, even though the market might experience some oversupply in the short term, it will start to tighten in the next three years as it becomes harder for supply to keep up with increasing demand.
“In the next seven years, we will see demand reach at least 1 million tonnes of lithium carbonate equivalent,” he said. “That is a huge amount of material that needs to be mined, that needs to be processed and converted to chemicals in a secure and stable way.”
Hofer added that this is not only a huge challenge in terms of funding but also in terms of conversion capacity and getting the right specifications.
Watch the video above for more of Hofer’s insights on the lithium space and which other key battery raw material every investor should keep an eye out for.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
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