Insights

Own ASX lithium shares? Here’s what the IMF is predicting for the sector

The future could be bright for lithium producers.
The post Own ASX lithium shares? Here’s what the IMF is predicting for the sector appeared first on The Motley Fool Australia. –

The International Monetary Fund (IMF) is predicting lithium prices will be in for a good run over the coming decades, and ASX shares might bask in the benefits.

As The Motley Fool Australia reported yesterday, the price of lithium is already near all-time highs. But, according to the international financial institution, it’s likely about to go higher.

The IMF has released its predictions for the future of 4 metals critical to renewable technology; copper, nickel, cobalt, and lithium. It notes demand for lithium and cobalt will likely lead the pack.

That’s good news for Australia and Australian lithium shares. Australia produces most of the globe’s lithium and houses many of its reserves.

On the back of the report, some market watchers might want to keep an eye on the big players in the ASX lithium sector. Such giants include Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS).

Additionally, smaller lithium producers such as Piedmont Lithium Inc (ASX: PLL) and Core Lithium Ltd (ASX: CXO) might be in for a productive few decades.

Is the future green for ASX lithium shares?

The future looks bright for ASX lithium shares, according to the IMF’s World Economic Outlook.

The report predicts that, if the world follows the IEA’s Net Zero by 2050 emissions scenario, demand for lithium and cobalt will soar. The IMF’s report states:

In the IEA’s Net Zero by 2050 emissions scenario, total consumption of lithium and cobalt rises by a factor of more than six, driven by clean energy demand…

Prices [of critical metals] would reach historical peaks for an unprecedented, sustained period under the Net Zero by 2050 emissions scenario. The prices of cobalt, lithium, and nickel would rise several hundred percent from 2020 levels.

In fact, the IMF estimates that, under the 2050 scenario, the cumulated real revenue from the global production of lithium would rise from US$18 billion in 2021 to US$1,170 billion in 2040. If the body’s predictions come true, it will be brilliant news for ASX lithium shares.

Currently, most of the world’s lithium is produced in Australia, while only Chile’s reserves outstrip those of Australia.

Further, it takes less time to get a lithium project up and running than those of other metals. That means lithium can react faster to the market’s shifting demands.

However, the IMF predicts critical metal prices will peak in the 2030s as renewable technology is implemented. Demand for critical metals is expected to wane after such infrastructure is built.

Additionally, the IMF warned surging prices of critical metals could hamper the global shift to net zero. It stated in its report:

A credible, globally coordinated climate policy; high environmental, social, labour, and governance standards; and reduced trade barriers and export restrictions would allow markets to operate efficiently, directing investment to sufficiently expand metal supply— thus avoiding unnecessarily increasing the cost of low-carbon technologies and supporting the clean energy transition.

The post Own ASX lithium shares? Here’s what the IMF is predicting for the sector appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More reading

Here are the 3 heaviest traded ASX 200 shares this Wednesday so far

Why is the Core Lithium (ASX:CXO) share price surging 15% today?
Pilbara Minerals (ASX:PLS) share price struggles despite plant restart milestone
Here are the 3 heaviest traded ASX 200 shares on Tuesday so far

Why Alumina, Aurelia Metals, Netwealth, & Piedmont Lithium are storming higher

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!