Lithium Demand Is Staying High
In 2017 lithium prices were rising and everyone predicted they would continue upward. In 2018, some analysts, including Morgan Stanley and Woods Mackenzie, began to expect lithium prices to fall back.
Why Lithium?
- The era of the lithium ion battery is still in its infancy, the next decade will see massive growth at every level of the supply chain.
- Rapidly growing market driven by growth in electric vehicles and falling cost of production of lithium-ion batteries
- Electric car revolution is just starting – dozens of other new electric car models are on the way from BMW, Ford, Hyundai, Volkswagen, Lamborghini, Volvo, Mercedes, others
- More Giga factories are being built (LG, Volkswagen, Mercedes, China)
- Volkswagen says it will turn out three million electric vehicles a year within two years
- Goldman Sachs conservatively expects demand for lithium to triple by 2025
- Large storage batteries for wind and solar farms, ie. Aliso Canyon (California) 326MWh of lithium ion-batteries and Hornsdale (Australia) 129MWh
A few points to support that idea:
- EV’s will require massive amounts of lithium compared to historic uses such as camera and hearing aid batteries.The Tesla Model S battery pack, for instance, requires 63 kg of lithium.
- Fleet and municipal buyers are important. Electric bus sales are growing 33% a year. 30 US cities, including Los Angeles, Seattle, San Francisco and Portland municipal governments have agreed to start a partnership to mass-purchase EVs for their public vehicle fleets. That includes passenger cars, police cruisers, street sweepers and trash haulers.
- National energy programs will also drive lithium demand. Britain and France will ban sales of gas-powered cars after 2040; India draws the line at 2030. Norway wants all new cars sold to be EVs by 2025. China continues to work toward a timetable, but it will be aggressive
- SQM a major lithium miner in Chile, predicts demand will grow 80% a year—SQM does not benefit from encouraging new supply, which lends that prediction a lot more credibility.
What's Coming Next
- Volkswagen Group (“VW”) and Ganfeng Lithium Co. (“Ganfeng”) sign MOU on long-term supplies for battery cells.
- Ganfeng is China’s largest lithium compound producer.
- Ganfeng to supply VW and its suppliers with lithium for the next 10 years
- VW plans to launch 70-plus new pure electric vehicles.
- Ganfeng tying up supply with a strategic investment in Pilbara Minerals (ASX: PLS).
- Snow Lake Resources signs MOU with Sinomine’s Tanco Mining facility to fast track Thompson Brother lithium project.
- Volvo signed a multi-billion-dollar supply deal with Chinese battery manufacturer CATL and Korea’s LG Chem to supply its planned fleet of electric vehicles.