Lithium prices may fall

The rise of the new energy automobile industry has expanded the market demand for lithium resources, causing the soaring price of lithium. However, a recent report from Morgan Stanley indicates that lithium supply may exceed the demand for lithium in new energy vehicles in the future, and lithium price may drop by 45% in 2021.

Mr Wang told reporters, working in the field of new energy industry in addition to the new energy vehicle supplier, new energy industry demand is to reduce the price of the lithium battery. The conclusion of report for new energy industry is good.

According to Goldman sachs estimates, the demand for lithium battery of a tesla ModelS type electric vehicles, equivalent to 10000 smartphones is the summation of the demand for lithium batteries. As countries are fuel cars out schedule, actively promote the new energy automobile popularization, entered the stage of rapid development of new energy automobile market.

The global new energy car sales maintain sustained growth in recent years. According to relevant data show that in 2015 the global new energy car sales to 519100 vehicles, up 73.03%;In 2016 to 764300 vehicles, up 47.24%;In 2017 to 1.2241 million vehicles, up 60.16% from a year earlier.

Lithium carbonate is one of the important raw materials of power battery. From the whole market level, the new energy automotive industry lithium electricity rising pool of demand for lithium price is rising. Android market research institutions and information, according to data from the 2017 domestic battery grade lithium carbonate market price is the biggest gain of 47.54%, reached near high price 180000 yuan per ton.

The industrial metals research publications MetalMiner article points out that in the past or now, lithium resources are very rich, say the shortage, just enough scale extraction. So, lithium prices will encourage more mining investments, thereby increasing the supply of lithium.

Learned, prices due to lithium, lithium salt processing enterprises, power lithium battery enterprise, the enterprise all have layout resource market, many have nothing to do with lithium company is also the original layout this market, the growing global lithium supply. Chile, Australia and other major global lithium lithium mining area are expanding production.

Morgan Stanley said in a report, recently, the world's largest lithium suppliers from Chile are planning a new project, plan lithium production, an increase of 500000 tons annually until 2025. Among them, the two suppliers of low cost lithium Chile chemical mining company (SQM) and alberta mar (Albermarle) every year to increase the output of 200000 tons of lithium respectively, make Chile lithium supply ranking rose to the third world.

Chile rapidly growing supply of lithium, large area cover global demand for lithium, challenging China, the United States and Australia. It is understood that the United States and Australia can through the exploitation of new mines, adding lithium supply, but production costs are higher than Chile, while China due to the lithium resources itself is not very rich, and it is difficult for domestic lithium mining, multiple acquisitions overseas company lithium resources in recent years, expanding capacity.

Morgan Stanley estimates, because both countries to expand capacity, from 2017 to 2025, lithium supply will increase at an annual rate of 16%, compared with demand growth was only about 12% a year. Lithium in the end, 2018 will be the global market in short supply in the last year, after 2019, the excess supply of lithium market will appear. Report also said that the market penetration in the prediction of new energy cars, too dependent on commitment to the automotive industry, without fully considering the consumer's value proposition and the required infrastructure.

The price is affected by supply and demand. Lithium supply is increased, and the overvalued and the demand for lithium lithium future prices will suffer.

The report predicted that due to the current supply and demand of lithium is still relatively tight, the short term price will not change too much, but in the long term, lithium prices will inevitably fall. Lithium prices are expected to fall from $13,375 per tonne in 2018 to $8,523 per tonne in 2020 and further to $7,332 per tonne in 2021. Around 2025, the price of lithium will drop to about $7,030 a tonne.

Bank of nova scotia commodities research at Ben Saxony (BenIsaacson) is also expected, in the long run, lithium price will drop to $8000 to $10000 per ton.

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