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This year's mega-rally in lithium prices could have more room to run, thanks in part to the Biden administration's Inflation Reduction Act, lithium executives said this week at Deutsche Bank's annual lithium and battery supply chain conference in New York.
"Everybody needs lithium," so pricing will remain strong, Albemarle (NYSE:ALB) executive Eric Norris told Bloomberg at the conference, adding the U.S. climate bill may "reignite our M&A."
The company is looking at targets in jurisdictions such as Canada and Australia, which have free trade agreements with the U.S., Norris said.
The IRA's economic incentives should lead to domestic investment in lithium, according to Piedmont Lithium (NASDAQ:PLL) COO Patrick Brindle, whose company received $141.7M in grants for projects aimed at boosting the U.S. electric vehicle battery supply chain.
More than $13B of investment in battery raw material production and battery and EV manufacturing has been announced in the three months since Biden signed IRA into law in mid-August, according to Bloomberg calculations.
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Goldman Sachs recently forecast continued high prices for lithium in the near term, boosted by restocking demand from iron-based electric vehicle battery expansion and higher than expected EV sales in China.
Goldman sees the global lithium market in an 84K-ton deficit this year, compared with a prior forecast of an 8K-ton surplus, but it forecasts supply will begin to outpace demand starting in H2 2023.