AMX Mining | Market Outlook

Market Outlook

 

In 2015 the lithium market was predominantly served by four major suppliers. According to the United States Geological Survey an estimated 32,000 tonnes was produced from Australia (41%), Chile (36%), Argentina, (12%) and China (7%) exploiting hard rock deposits and brines respectively. For most of the 2000’s the lithium carbonate price steadily increased, however over the past 12 months the price has dramatically increased, leading to a new boom in project acquisitions across the world, as companies scramble to secure tenure across land prospective for extraction.

 

Lithium and its compounds have several industrial applications, including: heat-resistant glass and ceramics, lithium-ion batteries, grease lubricants, flux additives for iron, steel and aluminium production. Nevertheless, lithium is mainly used as a component of rechargeable Li-ion batteries.

  • Its use in Li-ion batteries is perhaps its most common and most important use today. It’s found in rechargeable batteries that power cell-phones, smartphones, tablets, laptop, digital cameras, and even electric cars. You can also find this element in non-rechargeable batteries, which provide power for clocks, heart pacemakers, and various toys.
  • As lithium carbonate, it’s a pharmaceutical. It’s been prescribed for conditions such as manic depression and bipolar disorder. It acts on the nervous system, and it can modify your actions and behaviour.
  • It is also used as an alloy mixed with aluminium, so that it can strengthen aircraft. This alloy can also be used for high-speed trains and high-quality bicycle frames.
  • Alloyed with magnesium, it is used to make armor plating.
  • It is used as lithium oxide in glass ceramics and special glasses.
  • It is also used as a desiccant in air conditioning systems, as lithium bromide and lithium chloride.
  • As lithium stearate, it is used as an all-purpose lubricant although it is especially ideal for high temperatures.
  • And as lithium hydride, it can store hydrogen so it can be used as fuel.

It is quite a versatile metal, when mixed with other elements. But its use in Li-ion batteries will be the deciding factor in how the world needs it for the next few years.

 

 

 

 

 

 

 

 

 

 

 

 

According to the US Geological Survey, with the current global production of 37,000 tonnes a year, mankind has enough reserves for 365 years—if current demand remains the same. But experts predict that by 2040 the world will need 800,000 tonnes of lithium for just battery production alone!

 

The global lithium market is growing rapidly due to developments in the technology and energy
sectors, especially in the use of lithium-ion batteries for automotive and domestic applications.
Presently two thirds of global consumption is used in ceramics, glass, polymers and alloys, however growth in the technology and energy sectors will see consumption in Lithium-ion batteries overtake ceramics and glass.

Continuous advances in the rechargeable battery market will fuel demand for the Lithium as world demand for hybrid and electric vehicles, energy storage systems, and portable electronics continues to grow. Rising demand for Lithium-ion batteries will come from the increasing incomes in emerging and developing countries as they shift to better performing batteries.

 

 



This rising demand is brought on by the fact new sources of lithium raw materials are needed and as things stand, currently there is not be enough lithium to supply the battery mega-factories coming on-stream in the near future. The short to medium term growth in the lithium market will be limited by supply constraints, with few new operations being commissioned and four producers controlling much of the market. It is clear that new sources are required to meet growing demand.

 

Lithium Market Drivers and Trends


Smartphones Market Drivers
1. Emergent markets
2. Renewal ratio increase
3. Smartphone penetration increase


Lithium Batteries for smartphones – Trends
1. Laminates ratio increase
2. Increase of thickness
3. Increase of >1,400 mAh capacity


Portable PCs market – Trends
1. Mature market – stable or decreasing
2. Growth driven by emerging markets
3. Ultrabook is increasing
4. ASP (Average Selling Price) decreasing (<$499 Portable PCs showed increase from 25% in 2010 to
35% in 2016)


Lithium Batteries for portable PCs – Trends
1. Thinner cells
2. Polymer penetration increasing from 7% in 2010 to 28% in 2025
3. >2,800 mAh capacity for premium / corporate
4. >2,200 mAh capacity for consumer, emerging markets

 

China demand

In China the sale of all-electric and hybrid vehicles more than quadrupled between 2013 and 2014. China will continue to draw demand from the industry as it dominates the world lithium market due to the country’s massive output of goods manufactured with the metal.

China is expected to rank the world’s highest annual growth increases in lithium demand as it expands its electrical vehicle market. The other major suppliers of Li-ion batteries in the Asia Pacific region include South Korea and Japan which are also projected to see increases in market. Salt lake lithium brine production in China is very limiting. The industry currently has an annual output of 10,000 tonnes of lithium carbonate and hydroxide. Although the production capacity in recent years has increased significantly compared to previous years. According to statistics, in the year 2015, China produced approximately 25,000 tonnes and imported 36,000 tonnes of spodumene concentrate. Every year China imports a vast amount of spodumene concentrate. According to statistics in 2012 China imported 280,000 tonnes of spodumene concentrate. In 2013 the country reduced its imports to 250,000 citing high ore prices.

In recent years the lithium carbonate equivalent prices were on a downtrend, some producers were forced to reduce their output in the second half of the year and domestic producers were actually forced to shut down. This economic downturn lead to a reduction in spodumene concentrate imports for 2013 however the imports have since recovered as China imported 330,000 tonnes of spodumene concentrate in 2014 and 360,000 tonnes in 2015.

China's production of lithium is mainly from brine salts which is quite complex, resulting the country being dependent on importing spodumene concentrate which accounts for 66-70% of the market. It is understood, while a small number of Chinese enterprises import high concentrated brine from processing facilities abroad which accounting for about 16% of the market. However there are some companies using domestic mineral resources of lithium brine and salt production accounted for about 14 percent of the market. Chinese production of lithium salts faces long-term dependence on imported raw materials for processing.

In recent years China has become a considerably big consumer of lithium. In 2014 China's total consumption reached 65,800 tonnes, accounting for 40% of the world lithium consumption. By 2015, the annual consumption rate of lithium increased by 20%, to 7.87 million tonnes. It is expected that the supply market for lithium to be tight and remain at high levels in the short term.

 

Other sources of demand

 

Other end uses for lithium (glass and ceramics, lubricating grease, and metallurgy) and their markets are forecasted relative for moderate gains. The lubricating grease segment will boast the best performance of these markets, spurred by the use of lithium-based greases in industrial and transportation equipment. The demand will also be strong in the smaller aluminium alloy market, where lithium is used to reduce weight and improve alloy strength. Presently, the global market consumes around 200,000 tonnes of lithium carbonate per annum. Growth in the technology and energy sectors may see consumption double to over 400,000 tonnes of lithium carbonate by 2025.