Benjamin Cox discusses the complexities of the lithium market by comparing it to scotch in how supply and demand play out. With scotch, supply lags five years behind demand, since theoretically it takes at least five years for it to age. Lithium is similar in how supply is determined three years prior to it being available. Benjamin uses the auto market to show this; specifically, how demand for cars typically goes down 25% (which he points out is a fairly normal shift). The supply level for lithium has already been determined, even though it is about to have a major shift in demand. Benjamin contends that this will cause lithium’s price to plummet, which will then cause people to turn down lithium production, which will then be an issue once demand is needed and there is too little supply. Benjamin thinks that this will lead to bankruptcy for producers in the lithium market, and he fails to see how it can be a stable business.
Watch on YouTube: https://www.youtube.com/watch?v=IFeRPVGee8Q