Lithium: Market positivity at CNIA Lithium Branch annual conference

Roskill recently attended the 2020 China Nonferrous Metals Industry Association (CNIA) Lithium Branch annual event at Suining in China’s Sichuan province, where overall market sentiment was positive following downstream recoveries since July. More than 200 attendees were present at the event from the supply chain and downstream, including battery makers and OEMs.

Key takeaways

Greater than expected recovery in the EV market in Europe, in spite of COVID-19 related impacts, has brought more confidence to demand growth forecasts for lithium refined products in 2021/2022. Demand for TG and quasi-BG lithium carbonate has been boosted by recoveries in production of LFP/LMO cathode battery cells, soon after the initial virus controls in China. With the winter season approaching, the limitation on brine output in China may provide better support for TG lithium carbonate prices. Conversely, BG lithium carbonate and hydroxide stocks are being drawn down, though stocks remain significant, limiting upward pressure on prices.

CNIA Lithium Branch reported domestic consumption of lithium refined products to have grown from 78.7kt LCE in 2015 to 192kt LCE in 2019, with an average annual growth rate of 24%. It also forecast demand from the battery sector to reach 810kt LCE in 2025, notably higher than Roskill’s forecast of 682kt LCE. Consumption of lithium refined products in EVs was forecast by CNIA to be 640kt in 2025 based on global EV sales of over 16M units, with EV sales rising to 35M units by 2030.

Dongshu Cui from CPCA and Yonghe Huang from CATARC presented on recent developments in the EV industry in China and overseas. NEV growth (including EVs and hybrids) in Europe has seen new momentum, driven largely by EU CO2 emission regulations and subsidies. The market share of European NEV sales has increased from 26% in 2019 to 43% in 2020, while China’s portion dropped from 51% to 39%. The global EV industry is expected to shift from being policy-driven to demand-driven between 2020 and 2025, with this trend expected to accelerate once EVs maintain an up-front cost advantage over traditional ICE vehicles.

Roskill’s Lithium: Outlook to 2030, 17th Edition report was published in August 2020 and includes full analysis of the impact of COVID-19 on supply, demand and prices, as well as profiles of the main producers. Click here to download the brochure and sample pages for the report, or to access further information.

Roskill’s Lithium Cost Model Service is designed to provide miners, financial institutions, governments, and other industry stakeholders with an in-depth understanding of the costs involved throughout the lithium supply chain; for more information, click here.

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