Albemarle Corporation (ALB) is drawing significant attention from hedge funds as a promising lithium stock. Despite challenges in pricing and demand in 2023, the U.S. and Canadian lithium sectors are poised for growth in 2024. Several construction projects might commence to enhance domestic lithium supply. According to an S&P Global report, despite slow activity and falling prices, especially in Asia, the long-term demand for lithium remains robust due to the global push toward electric vehicles (EVs) and energy storage.

Even with the dip in lithium prices in 2023, the future of the EV market is optimistic. EV sales are projected to hit 30.81 million units by 2027, and lithium prices may stabilize between $20,000 and $25,000 per metric ton in the coming years. The industry’s cyclical nature doesn’t deter investments, especially with the regulatory push for EVs in nations like Canada.

Long-Term Outlook for Lithium

The International Energy Agency (IEA) predicts a tenfold increase in lithium demand under the Net Zero Emissions scenario, potentially reaching 1,700 kilotonnes. Battery storage developments further bolster the lithium market, with expectations for demand to rise tenfold by 2050.

Though emerging technologies like sodium-ion and vanadium flow batteries might slightly affect lithium demand, its role in battery production remains predominant. Additionally, solid-state batteries could spark new demand for lithium by 2040.

Dealing With Supply Shortages

According to Benchmark Mineral Intelligence, lithium-ion battery demand is set to nearly quadruple by 2030, possibly reaching 3.9 terawatt-hours. While a lithium surplus is anticipated until 2029, the supply of environmentally and socially responsible lithium is currently inadequate to meet demand.

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