Lithium Market Expected To Struggle To Meet Demand Through 2025

OCT 24 2018 BY VANJA KLJAIC 14

The production of the material that are essential in making batteries for electric vehicles will impact the market in the forthcoming years.

For lithium producers, the inability to lift output fast enough to meet the demand for the most coveted material, essential for producing electric vehicle batteries, will undoubtedly cause some problems in the forthcoming years. This was revealed earlier this week by the sector’s newest public company, Livent Corp who have expressed their worries about the greater risks imposed in the near future, thanks to the consistent deficit on the market.

“We think demand is going to grow almost five times larger in 2025 than it was in 2017,” CEO Paul Graves said in an interview Thursday in New York, as the supplier made its trading debut. “Our biggest challenge is producing enough to meet the demand — there’s a much greater risk that this market is consistently in a deficit in the near future.”

The long-term outlook considering the lithium demand from Livent, a spinoff from chemical maker FMC Corp., is shared by their competitors, like the Chinese-based company Jiangxi Ganfeng Lithium Co., which this week sold shares in Hong Kong for the first time. However, it seems that the investors haven’t been immediately swayed, focusing instead on concerns new supply may flood the market in the short term. Furthermore, the potential decline, coming after a rally that tripled prices in the three years through 2017, also causes concern for potential investors.

Hence, the shares of the Philadelphia-based Livent closed little changed Thursday, while Ganfeng plunged 29 percent on its Hong Kong debut.

“The poor performance reflects lack of confidence in the near-term lithium market,” Argonaut Securities (Asia) Ltd. analysts including Helen Lau said in a Friday note. “We think markets have indeed over-reacted to the current price performance and overlooked the demand growth prospects.”

There are several reasons behind the inability for these companies to lift output fast enough to meet the demand set forth by the world car industry. For some, it’s the capital they’re unable to raise that would fuel their expansion. Some others are faced with face regulatory hurdles, dimming the supply outlook. For Livent’s Graves, 47, who was FMC’s CFO and worked at Goldman Sachs Group Inc. for 12 years, including as co-head of natural resources in Asia, expansion into other countries is needed in order to meet the ever increasing demand for this material.

“Our next priority is to expand our Argentina production as quickly as we can to meet that downstream need,” he said.

Even more, according to Ganfeng’s Vice Chairman Wang Xiaoshen, giving an interview Tuesday, there is a potential risk of a lithium shortage longer term, particularly from around 2023 to 2024, when production of electric vehicles is set to accelerate even further. And that could cause additional problems. The world is gearing up for an electric revolution, but it seems that the lithium industry – the one supplying its core materials – may not yet be ready for it.

Source: Autonews

Categories: Battery Tech, General

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14 Comments on "Lithium Market Expected To Struggle To Meet Demand Through 2025"

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Stanislav

If they think demand will grow only 5 times they are so wrong!

Roy_H

Yeah, 50x is more like it.

G2

I’ve got money in a Lithium ETF and it has dropped 25% over the last 11 months. Hope the demand starts to surge soon.

Rebel44

For that, new battery factory capacity need to be finished faster than the growth in Lithium demand (I have no idea if that will happen soon or not).

Spider-Dan

And for THAT to happen, EV demand has to grow faster than new battery factory capacity is finished. Definitely possible if you are selling cars with a Tesla logo on them, but not so much if you aren’t.

Jimmy

Try buying a Hyundai Kona EV, even if your dealer takes your deposit it will be 2020 before you can get one. If you have the money then top of the range Teslas are the only ones you can buy new this side of Christmas.

Spider-Dan

I’m pretty sure Bolts are available, as are Volts and Leafs.

viriato

Is a very risky business. All this investments, must to be returned in a few years, because probably new technologies free of lithium, will arrive in not so far future.

A pair of thoughts. This may to do more expensive the batteries due they must to make all of this profitable y a short lap of time before the lithium technology will have a substitute?. May this investments delay the arriving of other technologies until have enough profits with the lithium?.

andi_nan

Before the lithium technology will have a substitute? What substitute?

Jimmy

New technology is solid state lithium, which uses even more lithium. There is no shortage of lithium or miners ready to mine it if the price is right. There will be demand for it for sure but I have a feeling the Chinese battery makers are talking up demand simply to create oversupply and force lithium miners to accept lower prices and sell close to cost of production. Same as they did with the iron ore miners in recent times. Of course in a few years there will be a lot more lithium batteries that can be recycled just like scrap iron is reused by steel makers.

Lots of lithium mines and prospects just waiting to be used properly. If the price on lithium goes up just a bit there is almost endless supply.

And one day it might even be worth to recycle lithium from old EVs. 😉

Spider-Dan

If you don’t have your own lithium mine to bypass the future lithium shortage, you are not a serious EV automaker and you’re just producing EVs to get and/or sell compliance credits!

Oh wait, I guess that argument is only supposed to be applied to battery factories, not any other potential bottleneck in the supply chain…

menorman

I would imagine that the folks here certainly know that the picture at the top isn’t an accurate depiction of how lithium is obtained…

G2

Yah; that looks like a coal strip mine.