Due to the slowdown in the expansion of production capacity of various manufacturers, the global lithium market is expected to return to balance in 2020. However, in the shadow of the outbreak of a new coronavirus in China, it is also doubtful whether the demand for battery lithium can recover in the near future. The long-term growth prospects of the global lithium market remain strong. In this report, BNEF updated the short-term and long-term forecasts on lithium market demand and supply, financing, cost curve and producer market share.
After the lithium salt manufacturers postpone the capacity expansion plan in 2019, the lithium market is expected to restore the balance of supply and demand in 2020. In the near term, BNEF believes that the spot price of lithium carbonate in China is close to the current US $ 7,000 / ton LCE, and the price of lithium hydroxide is close to US $ 8500 / ton LCE. If the Chinese electric vehicle market unexpectedly recovers strongly in the second half of this year, lithium salt prices may increase accordingly. However, if the impact of the new coronavirus epidemic continues into the second quarter of this year, the price of lithium carbonate may fall below $ 7,000 / ton LCE.
In 2020, China's passenger car sales may be only 1.2 million units, so lithium salt demand will be less than 300,000 tons of LCE. The Chinese government is considering the introduction of policy measures to promote the sales of electric vehicles, including postponing the retreat of subsidies for new energy vehicles.
Until 2030, although accelerating the recovery of refining capacity is facing the risk of increased environmental costs and there is still demand, the cost of lithium carbonate production by integrated lithium brine extraction manufacturers in South America is still the lowest in the world. The current lithium hydroxide production model is to export spodumene from Australia to Chinese refineries, and to achieve integrated production in Australia ’s lower cost refineries, or to process industrial grade Latin American production in other Asian countries (such as Japan and South Korea). Lithium carbonate has the potential to subvert the current production model.
BNEF predicts that the lithium market demand (including battery and non-battery demand) in 2030 is 2 million tons of LCE, and the current lithium concentrate production capacity under construction is difficult to meet such a large demand. The improvement of battery recycling technology can bring the recycling capacity of 24.1 tons of LCE, which helps to maintain the market balance until 2029.
As of the end of fiscal year 2018, lithium salt manufacturers tracked by Bloomberg attracted a total of $ 36.5 billion in investment through debt, equity or mergers. A large part of it was originally planned for capacity expansion. However, the investment in the lithium market is clearly insufficient to support the demand for lithium salts in 2030. BNEF estimates that lithium salt manufacturers will need to invest an additional US $ 25-30 billion in the next ten years in order for lithium production capacity to meet market demand in 2030.
A set of data
USD 7 / kg LCE
BNEF believes that the price of lithium carbonate will be close to the current price in 2020
Years where lithium hydroxide may be in short supply.
USD 25-30 billion
To meet the market demand in 2030, lithium salt manufacturers need to invest in capacity expansion in the next decade.