Lithium demand will raise more than threefold by 2027
According to Roskill’s 15th edition market outlook report, the future is bright for the lithium industry.
As the demand for lithium-ion (Li-ion) battery technologies such as phones, laptop, battery-powered cars grows, so does the need for raw materials to build these technologies.
It is expected that the demand for these products will increase 650% by 2027 and, as a consequence, the industries demand for lithium could rise to more than threefold over that period.
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EV industry as driving forces for lithium demand
The report shows how the primary driver for this increase is the demand generated by the production of rechargeable batteries (over 43% of total demand).
Within this percentage, the demand generated by the production of batteries for electric vehicles is indeed the main influencer and driving force.
In 2017 the automotive industries needed over 34,000t LCE (Lithium Carbonate Equivalent) for the production of electric cars and it’s estimated that this figure will double by 2020
Roskill analysts believe that this trend will also continue in the next decade and that the in 2027 the growth of the industry and the market penetration of electric vehicles will be significant enough for these vehicles to compete, on a price level, to conventional petrol-fueled models.
The capacity of Li-ion batteries in the automotive industry is forecast to exceed 1TWh in 2027.
Energy storage systems (ESS) are estimated to have a similar level of growth; however, the competition from other battery technologies could affect their growth in the forthcoming years. It’s also predicted that portable electronics will reach 140MWh capacity by 2027.
The major players in the lithium industries
Countries like China and Australia are major producers of this valuable material with 340kt LCE and 157 kt LCE per year of production respectively, while the leading companies operating in the field are Albemarle, SQM, Talison Lithium, and Ganfeng Lithium.
These companies are now facing the important challenge to expand production capacity and processing facilities due to the continuous increase in demand.
Very interestingly major OEMs (original equipment manufacturer) are also becoming interested in the procurement of lithium, financing its operations directly.
Amongst them, some important automotive manufacturers are making relevant investments in this sense, like China automaker Great Wall Motor which purchased 3.5% of Australian lithium miner Pilbara Minerals last year, and Jiangxi Special Electric Motor, which agreed to pay $15M for an 11% stake in the Australian mining company Tawana Resources NL.
The Roskill report expects the price of lithium to reach its peak in 2018 however, as a higher supply of this materials will reach the market in 2019, prices are expected to fall back in 2019 to a minimum of $11,000/t battery grade lithium carbonate.
After 2021, Lithium prices are expected to grow again as the demand will continue to be strong and this will push the price up for the forthcoming years.