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Roskill: refined lithium supply expected to treble to 900kt by 2027, driven by use in batteries

Growth in the consumption of lithium accelerated in 2017 by more than 10% on 2016 levels to reach 211,000t lithium carbonate equivalent (LCE), according to a new report by Roskill. The lithium-ion battery industry has been, and will continue to be, the main catalyst for growth; it accounted for close to 50% of consumption in 2017 and is expected to reach over 80% by 2027.

Automotive applications were the largest market for Li-ion batteries in 2017, with Chinese sales of plug-in electric vehicles (PEV) increasing by around 20% y-o-y. This placed strain on the battery supply chain which is likely to continue, with Roskill estimating that Chinese PEV sales could reach around one million units in 2021.

The lead-time between first purchase of lithium compounds and then subsequent use in Li-ion battery applications created by the automotive industry supply chain increased demand ahead of consumption by 9% in 2017, a trend which Roskill expects to intensify over the coming years. Demand for lithium is expected to approach 1.0Mt LCE in 2027.

Lithium carbonate remains the main lithium product used for batteries, forming more than 80% of consumption. Roskill forecasts that the use of lithium hydroxide will become more prevalent, however, accounting for more than 25% of lithium compounds used in rechargeable batteries by 2021 and around 55% by 2027, as end-users switch to high-nickel cathodes as a result of their higher energy density and lower cobalt content.

Increased demand for lithium compounds used in the Li-ion battery industry has also built on top of steady demand growth from industrial applications, which is expected to track more closely to GDP growth.

New lithium operations. Forecast strong demand growth has incentivized the expansion of existing assets and the development of new lithium operations. The build-out of new and expanded capacity is expected to continue the oversupply of mined products, and extend to refined products towards 2020.

Despite the oversupply, markets for battery-grade lithium compounds are expected to remain tight as the barriers to entry for higher grade products are more complex and demand growth is greatest for these products.

Mine supply of lithium is forecast to reach more than 365,000t LCE in 2018 including processed DSO (direct shipping ore), with the supply of refined lithium expected to total 270,000t LCE. By 2027, lithium mine supply is forecast to increase by more than 160%, whilst refined supply is forecast to more than treble to 900,000t LCE. Supply from secondary sources is expected to show continued growth throughout the forecast period, albeit still representing less than 5% of total refined production by 2027.

Lithium prices continued to increase in 2017, for both contract prices, and Chinese spot material. Lithium carbonate and hydroxide prices are forecast to peak in 2018, before greater supply availability causes prices to fall back in 2019.

Roskill expects a price floor of US$11,000/t battery-grade lithium carbonate, before continued demand growth for battery grade lithium compounds applies greater demand-side pressure on prices beyond 2021. The premium for battery-grade lithium hydroxide over lithium carbonate is expected to re-emerge in the short term, but could disappear with more independent lithium hydroxide production from mineral concentrates.

Roskill’s Lithium: Global Industry, Market and Outlook Report 15th edition was published in June 2018. It provides a comprehensive overview of production, consumption, trade, prices, major producers and development projects forecast to 2027.

Comments

Centurion

Estoy ciego o soy el unico que ve un crack del litio en el horizonte.

Gasbag

Si. Estas ciego.

Lad

Currently the only lithium mine in the U.S. is at Silver Peak, Nevada, about a 3-1/2 hour drive from the Tesla Gigafactory:
http://fortune.com/2016/03/29/lithium-tesla-mine-nevada/

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