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Market intelligence firm SpendEdge has published a new report which states that the global market for lithium will likely record a 10% annual growth through 2024.

Spending on lithium is forecasted to be over $190 billion by 2024 owing to an increase in demand for Li-on batteries. The demand is a result of surges in the sales of electric vehicles.

Moreover, the transition to renewable energy resources from fossil fuels will increase both the demand for energy storage systems and lithium.

Other key study findings include:

  • While suppliers are ramping up their production capacities of lithium in response to the exponential demand for Li-ion batteries, this is eventually resulting in an oversupply. During the forecast period, this oversupply will bring down the lithium market price.
  • Buyers are advised to expect minimal transparency in pricing from lithium suppliers as most of the lithium products are traded using long-term contracts owing to the presence of a very few leading players.
  • Maintaining an effective supplier relationship will be the key to survive in the lithium market that has no internationally recognised pricing mechanism which will create instabilities in pricing strategies. On this note, buyers are advised to collaborate with lithium suppliers to establish a mutually beneficial pricing mechanism. This will help both the buyers and the suppliers to set up contract prices at which lithium will be procured during the contract period and threshold price which refers to the price after which any increment in cost is passed on to the buyer.

Europe is expected to be the biggest spender owing to the financial initiatives taken by the governments in countries such as France and Germany to boost the local production of batteries.