Battery Metals

Time to get comfortable. The lithium market won’t be making any big moves any time soon.

It was a fairly quiet 2013 for the lithium market, with only a handful of companies making moves. And if you’re expecting that to change radically in 2014, well, think again. 

Daniela Desormeaux, economist and general manager at SignumBOX, spoke to Lithium Investing News about the lithium market in 2013 and what investors can look forward to in the coming year.

The primary driver for lithium is the battery market, and, more specifically, batteries for portable devices. Unfortunately, the electronics market has been soft, with global consumer spending and overall GDP leaving the industry awash in uncertainty. That is a major hurdle for the battery sector, and Desormeaux is not surprised to be seeing a slowdown in battery demand. “Demand used to grow at 6 or 7 percent per year,” she said, adding that for 2013, she only expects to see a 4 or 5 percent growth in the battery market.

What about 2014?

With global economies showing signs of stability, the hope is that recovery for the market is also on the horizon; however, Desormeaux believes a more conservative approach is best, and expects that 2014 is going to be very similar to 2013 for the lithium market.

“We hope in the next two years demand will recover and start to grow again at higher growth rates,” Desormeaux stated, adding “hopefully because of new developments, especially with electric cars.”

Electric vehicle manufacturers like Tesla Motors (NASDAQ:TSLA) are setting their sights as high as they can when it comes to anticipating consumer demand for their vehicles and what that translates into for battery demand. Most recently, the Palo Alto-based company announced its intention to build its own mega lithium-ion battery plant to supply future demand. That of course came on the coattails of a deal that will see Panasonic (TSE:6752) supply the car maker with nearly 2 billion lithium-ion batteries by 2017.

On the subject of electric vehicles, Desormeaux said that demand from these markets is small in comparison to other battery markets. Furthermore, electric vehicles are still relatively unaffordable, a fact that will have to change if the the market has any hopes of truly taking off. “I think that in two or three more years we can see new developments on the side of electric cars,” she said. Following any new developments, she believes that in another two or three years the market will finally see higher demand for electric cars.


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


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