Luosijier: The supply of refined lithium is expected to reach 9 million tons by 2027, mainly driven by battery use

In 2017, the rate of growth of lithium consumption accelerated by more than 10 million in 2016, reaching 211,000 tons of lithium carbonate equivalent (LCE). Lithium-ion battery industry has been and will continue to be the main catalyst for growth; It accounted for nearly 50 per cent of consumption in 2017 and is expected to reach more than 80 per cent by 2027. Car applications were the largest market for lithium-ion batteries in 2017, and sales of plug-in electric vehicles (PEVs) in China grew by about 20 miles year-on-year. This puts a lot of pressure on the battery supply chain. Roskill estimates that China's PEV sales may reach about 1 million units by 2021.

The delivery time between the first purchase of lithium compounds and the subsequent use of lithium-ion battery applications in the automotive industry supply chain increased consumption demand by 9 cents by 2017, a trend that is expected to intensify in future years. The demand for lithium is expected to be close to 1.0 million tons of standard coal in 2027.

Lithium carbonate is still the main lithium product used in batteries, accounting for more than 80 % of consumption. It is expected that the use of lithium hydroxide will become more common. However, by 2021, the proportion of lithium compounds used for rechargeable batteries will exceed 25 <UNK> and by 2027 it will reach about 55 <UNK>. Because the end user switched to a high nickel cathode with higher energy density and lower cobalt content. Increased demand for lithium compounds used in the lithium-ion battery industry is also based on a steady increase in demand for industrial applications, and the industry is expected to be closer to GDP growth.

Projections of strong demand growth have spurred the expansion of existing assets and the development of new lithium businesses. It is expected that new and expanded capacity will continue to supply excess products and continue to produce oil products until 2020. Despite the oversupply, the market for battery-grade lithium compounds is expected to remain tight, as demand for these products grows the most as they enter more sophisticated products. The supply of lithium is expected to exceed 365,000 tons of standard coal (including processing DSO) in 2018, and the supply of refined lithium is expected to reach 270,000 tons of standard coal. The supply of lithium is expected to increase by more than 160 tons by 2027, while the supply of refined materials is expected to exceed 90,000 tons of LCE. Secondary resource supply is expected to continue to grow throughout the projection period, although it will still fall below 5 per cent of total refining production by 2027.

For contract prices and Chinese spot materials, lithium prices continued to rise in 2017. The prices of lithium carbonate and lithium hydroxide are expected to peak in 2018 as supply availability increases and prices fall in 2019. The base price for battery grade lithium carbonate is expected to be $11,000 per ton before the demand for battery grade lithium compounds continues to grow. Demand for prices after 2021 is under greater pressure. The price of battery-grade lithium hydroxide and lithium carbonate is expected to re-emerge in the short term, but may disappear as independent production of lithium hydroxide in more mineral concentrates.

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