Lithium

The lithium industry has continued to experience rapid price developments in H1 2017 following on from the dramatic price increases witnessed in 2016.  In the first half of 2017, US lithium carbonate prices have increased by 2.5% from US$13,000/t to US$13,338/t according to Industrial Minerals, as the international contract price caught up with Chinese domestic prices.  Chinese domestic prices have also continued to increase during H1 2017, with lithium carbonate (99.5%, China) increasing by 8.6% to US$19,994/t in June and lithium hydroxide (96%, China) increasing by 1.58% to US$21,768/t also in June.

Lithium demand growth continues to be driven by the use of lithium-ion batteries in the electrification of vehicles and energy storage systems, though other end-uses for lithium are also showing growth at slower rates.  Announcements by both governments and major automotive manufacturers supporting the transition from the internal combustion engine to HEV/EVs support expectations of longer term growth in lithium consumption by the industry, though they have also emphasised concerns over whether lithium supply will be capable of meeting such strong demand growth.  Lithium consumption in 2017 is forecast to reach 216,500t LCE in Roskill’s baseline forecast, increasing from 197,000t LCE in 2016.  This is forecast to increase by over 350% in the years to 2026, which will require multi-billion US dollar investment in lithium production facilities.

On the supply side, H1 2017 saw the first shipments of spodumene concentrate from Neometals’ Mt. Marion mine and Galaxy Lithium’s Mt. Cattlin mine in Australia to mineral conversion facilities in China.  Increasing demand and prices have also supported the increased output of lithium compounds from lepidolite conversion in China, which was previously uneconomic to process.  Greater supply availability of lithium mineral concentrates in China is expected to continue into H2 2017 and 2018, as numerous lithium mineral operations are scheduled to start production and have signed off-take agreements.  Outside of China, Nemaska Lithium began production of lithium hydroxide at its phase 1 plant in Quebec, Canada and will supply material to Johnson Matthey for battery cathode raw materials.

Existing major producers have also been active, with SQM setting up a second joint venture with Kidman Resources at the Mt. Holland project in Australia, in addition to its JV with Lithium Americas in Argentina, signed in 2016.  Expansions at existing and new facilities operated by other major lithium producers including Tianqi Lithium, Albemarle and Ganfeng Lithium have also made progress in H1 2017.

 

Roskill’s Lithium: Global Industry, Markets & Outlook report has now been published. Click here to download the brochure or to access further information.

To discuss the lithium market with Roskill, contact Robert Baylis: robert@roskill.com