Lithium prices have sold off in the past week, will the sell-off continue? I don't think it will, too much…
@Epstein Research · · 6 upvotes · 3 replies
Lithium prices have sold off in the past week, will the sell-off continue? I don't think it will, too much demand from Battery Energy Storage Systems ("BESS")
Replies
@LG · 2026-05-20
definitely becoming a bigger piece of the lithium story, especially with grid-scale storage accelerating globally. Question is whether near-term oversupply still outweighs that demand growth for the next few quarters. whats your take? #lithium
@Epstein Research · 2026-05-20
The near-term oversupply narrative is a fear for 2H 2026, not a reality (yet). The thing with #lithium supply from #Africa and (surprisingly) from #Chile is that it simply cannot keep up with 10-15% CAGR in demand over the next 5+ years. Look what Albemarle & SQM say about their operations in the Atacama salar in Chile. Combined, those two companies provided up to 20% of total lithium carbonate equiv. ("LCE") units in any given year. But, those environmentally, politically sensitive operations are poised to grow no more than 6%/yr. for the foreseeable future due to water constraints. SQM clearly states this in earnings calls. A 6% CAGR through 2031 for SQM, but ONLY IF ALL GOES AS PLANNED, a big IF...
@LG · 2026-05-21
@[Epstein Research] Yes, but even if the near-term oversupply narrative proves overstated, the key question is what fills the gap. If China once again leans on Yichun lepidolite, the issue is not just whether that supply is low-cost or high-grade. It is whether China can mobilize enough marginal supply in a way western juniors cannot. Western #lithium projects need normal market signals to work: stronger prices, investor confidence, and access to capital. But if China can restart or expand domestic supply through policy support, vertical integration, cheap capital, and tolerance for weak economics, it can cap price recoveries before western supply chains get financed. In that sense, lithium is not just a supply-gap story. It is a price-signal story. If China controls enough marginal supply to shape that signal, the West can have the resources and still lose the buildout.