Daily Chemical Reaction
Lithium: Stronger for Longer or Hubris Following A Blow Out Year: High Prices Encourage New Entrants
Key Points:
- Clean energy mineral forecasts are broadly bullish. We see near-to-medium-term conditions staying tighter than most chemical markets, but our view is not risk-free.
- We discuss movements in Asia, Europe, and US natural gas prices and potential shifts considering European storage levels, the Freeport LNG restart, and future demand.
- We provide a global production cost curve view for lithium and bromine. Albemarle and a few of its peers are well situated in this area, which lessens relative return risks.
- We highlight the estimated benefits of Biden’s green subsidies through 2031 that will drive many markets, including hydrogen, inciting the envy of many foreign countries.
- The US leading economic indicator index eroded into late 2022, and we flag 3M 2023 views, rising auto loan delinquencies, and a potential strengthening in US fuel prices.
See PDF below for all charts, tables and diagrams