Lithium stocks mania to extend into 2024 as EV demand soars

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Analysts and investment bankers are watching merger and acquisition activity across a sector divided by cash-generating producers and speculative explorers.

Australia’s lithium boom remains one of the sharemarket’s hottest sectors with the commodity expected to remain in a supply deficit out to 2030 as demand for the battery ingredient from electric vehicle makers continues to soar globally.flagged a $1.1 billion windfall for investorsSurging demand for lithium, the key ingredient used in electric vehicle batteries, has spilled over into the ASX.Soaring demand for lithium has driven IGO’s shares 249 per cent higher over the past five years to a $10.

“Azure and Patriot have what looks to be high-quality resources, but those projects won’t be in production until 2029, maybe later, so there’s a long way to go,” Mr Shaw said. UBS still forecasts the lithium supply market to be in deficit by about 1 million tonnes a year in 2030, although Mr Shaw said recent falls in the lithium carbonate price to below $US3000 a tonne was pressuring valuations.

“We think downstream demand will remain strong due to growth in EV sales and increased battery use for energy storage systems. So, that will drive an undersupply by the end of the year and prices will rise and remain higher into 2024.”

 

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