While oversupply and low prices have been the main focus in battery raw material markets over the past year, particularly when it comes to lithium, substantial long-term shortages are still expected. Over the next half decade production cuts are likely to continue while long term demand is still set to rise.
The lithium market remains at the heart of the global energy transition, fuelled by the rapid expansion of electric vehicles (EVs) and the rising demand for battery storage. Despite recent market fluctuations, the long-term outlook for lithium remains positive. As nations push for clean energy solutions, lithium’s role in the future of transportation and renewable energy storage continues to strengthen.
The supply-demand gap
Forecasts suggest that lithium demand will eventually outpace supply creating a structural deficit in the years ahead. According to S&P Global, the lithium surplus is projected to narrow to 33,000 metric tons in 2025, down from 84,000 metric tons in 2024, as production cuts begin to temper excess supply.
According to industry projections, global lithium demand is expected to quadruple by 2030, driven by EV adoption, grid-scale battery storage and other technological advancements.
Written by Matthew Craig from The Market Bull
