Lithium To See Price Spike This Fall?

AUG 7 2016 BY MARK KANE 38

Behold Some Beautiful Mounds of Lithium

Behold Some Beautiful Mounds of Lithium

According to a OilPrice.com article, lithium prices will go up this year as oil prices don’t ever do.

The lightest metal was called hotter then gold in 2016, but the rush is still ahead of us, as demand growth to is expected to become exponential.

“Although the price trajectory of the metal has been subdued in recent months, the fundamentals behind the long-term trajectory suggest strong potential for long-term growth.

Price doubling from 2014/2015 was first seen in China and is now being felt worldwide, with lithium hydroxide prices from $16-20 and carbonate prices from $12-14 thousand USD per ton.”

At the root of the increase is of course the strong thrust from the automotive market, due to electric and plug-in hybrid cars. And prices will rise from pressure not only from Tesla/Panasonic’s Gigafactory, but other companies considering their own large lithium-ion battery factories.

A growing energy storage segment, spurred in large part by plug-in vehicle adoption is also likely to contribute to demand for lithium in a few years once it matures more fully.

As the price is a factor of demand and supply, it’s worth to note that four groups hold nearly 90% of the lithium supply, creating a specific oligopoly.  That said, new players will probably appear, as higher prices justify production from less favorable deposits.

source: OilPrice.com via Green Car Congress

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38 Comments on "Lithium To See Price Spike This Fall?"

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If lithium carbonate goes from $6400 per ton to a doubled $12,000 per ton, the price of a Volt would go up $325 and a Bolt/Tesla III would go up $1080.
If the worst case happens, i.e. a doubling of the price of lithium. But if the price goes up by 50% there will be a slow but steady increase in lithium production.
It is possible that there will be a spot spike in pricing, but the larger automakers have contracts in place that will reduce their short term exposure to price spikes.

What are your price increase estimates based on? Not contradicting you, just curious.

I recall reading, here & elsewhere, that the cost component of Li raw material in a battry pack is very low (according to the below, <1%):

http://batteryuniversity.com/learn/article/availability_of_lithium

Fed price reports on price per ton of lithium and approx 5 pounds of Li per kWh.

5 lbs? No way. Its somewhere between 0.6 and 0.9 kg/kWh. Thats less than 2 lbs per kWh.

If your numbers are correct and please forgive me, I am not refuting them, but if these numbers are correct why is the price of a kWh more than $100 today? Could it be because of the round the world trip that each Li atom travels before it ends up as a compound in a battery pack in a car? Could it be that Panasonic, BYD etc are profiteering?

why processors are so expensive? it’s just sand and some copper…

Anthony, I went back out and re-did my search and I found a Green Car site that said the if Tesla averages a 65 kWh pack, they would be using 10 kilos of Li on average. Those numbers look like they are close to yours rather than the articles I found earlier that said it took around 5 pounds for each kWh of pack.
http://www.greentechmedia.com/articles/read/Is-There-Enough-Lithium-to-Maintain-the-Growth-of-the-Lithium-Ion-Battery-M

Supply & demand Maybe the obvious part of the reason Elon Musk attempted to buy his own Lithium mine…Besides all that there is a very minute amount of lithium utilized in lithium batteries , the bulk of the battery is made up of other components..Lithium is the smallest part of the battery ,Infact Elon once said ,”there is so little lithium in a lithium battery ,that it shouldn’t even be called “The lithium Battery” However “Lithium” is, a Key component

This is just more “BS” Propaganda from the oil cartel ..To brain wash the weak & uninformed general public .cry wolf ..”SCARE THE SHEEP”

Exactly. Tesla, and every other battery manufacturer has already put into place long term contracts for lithium. Is this a “seeking alpha” source? I didn’t check.

Seeking Alpha is 90% garbage.

Well it’s OilPrice.com. So good to see some of the oil guys moving on to the next big thing, and not dying like the coal guys. So, eventually, electric demand will outstrip supply, but that will be medium term to long term. But, sure, now is the time to transition.

Here’s another link that indicates EV prices are not very sensitive to Lithium prices. And most battery and auto manufacturers have likely hedged their key materials to preclude price spikes.

http://cleantechnica.com/2016/05/12/lithium-prices-changes-unlikely-much-ev-battery-prices/

Indeed. The comments above grossly overestimate the amount of lithium per kWh in a battery pack. Quoting from the Battery University website: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The lithium raw material in a Li-ion battery is only a fraction of one cent per watt, or less than 1 percent of the battery cost. A $10,000 battery for a plug-in hybrid contains less than $100 worth of lithium. Shortages when producing millions of large batteries for vehicles and stationary applications could increase the price, but for now this is not the case. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ [end quote] I’ve seen other sources claiming the cost of lithium is about 2% of the cost of the battery. But in any case, the point is that the cost per kWh is pretty low and almost negligible. Doubling the price certainly won’t add thousands of dollars to the price of a 55-60 kWh battery pack. At an estimated pack-level price of $180/kWh for a Tesla battery pack, 2% would be $3.60 per kWh, or $198 for 55 kWh; 1% would be $1.80 per kWh, or $99 per kWh. But beyond that, any talk of increasing prices of lithium causing battery prices to go up is simply FUD intended to promote speculative… Read more »

Lithium is one of the most common metals on Earth. Lithium carbonate, the precursor material for li-ion batteries that contains lithium, is neither rare nor especially valuable; it’s sold by the ton, not the pound.

Nor do lithium ion batteries, despite the name, contain all that much lithium. For example, the 53 kWh battery pack for the Tesla Roadster contained only about 9 pounds of lithium.

One sees this sort of article, falsely implying that lithium is rare and valuable, all the time. They are written by those trying to promote stocks in speculative mineral prospecting companies. Caveat emptor: That type of business has the highest level of stock swindles of any business.

Bottom line: Nothing to see here. Move along, move along!

‘Most abundant’ is, in my opinion, going too far. I’d reserve that for aluminum, iron, calcium, sodium, magnesium, potassium and titanium. Lithium is 100 times less common than the least abundant of those, but there is still plenty of lithium available at low prices.

Well, that’s what I get for relying on memory and not checking my facts before posting.

Thanks for the correction, Ambulator.

Lithium may see price spike but it is not significant part of battery cost. Long term lithium prices can’t increase more than few times, because the ceiling is dictated by possibility to extract lithium from regular sea water. http://www.ipd.anl.gov/anlpubs/2011/10/71302.pdf page 47 What is much more concerning is cobalt. 90% or so of cobalt supply is byproduct of copper and nickel production, and it is not going to increase whatever price you pay for cobalt, as copper demand is by many orders of magnitude higher. So you only have so much cobalt on Earth to produce maybe few million car batteries per year and that is all, then the cobalt price will become astronomical for few percent of current dedicated cobalt production. Part of cobalt production now is used in very expensive products like aircraft engines and you can’t outprice them for cobalt. Another part is used in original cobalt based LCO chemistry LiOn batteries for electronics and hopefully they can be outpriced to use chemistry that uses much less cobalt. Or maybe not that easily as laptops are much less sensitive to battery price than cars. Cobalt usage is decreasing in car batteries, but still there are no LiOn chemistries… Read more »

“Cobalt usage is decreasing in car batteries, but still there are no LiOn chemistries suitable for cars that can work without cobalt.” Oh dear, I think the Chinese don’t know that yet. Because the vast majority of Chinese BEV buses and many of their BEV cars run on batteries that do not contain cobalt at all (and nickel only as part of the batteries steel casing…). Lithium iron phosphate (LFP) chemistry works quite well, granted at lower energy density when compared to other materials, but that does not matter so much on a bus, where there is plenty of space. Same goes for ESS. vast majority of the current Li-ion ESS-solutions on the market are LFP based.
Besides, when there is demand for Co, additional mines will open. Compare what happend with nickel a few years back. The Chinese needed Nickel. The Philippines, which had no production at all not so long ago, are now the largest nickel producer and exporter in the world.
Cobalt comes indeed with nickel, but guess what: the metal in Tesla’s cells is (aside from lithium) 16 parts nickel, 3 parts cobalt and 1 part aluminum (give or take)

Are you seriously suggesting everybody would switch to LFP for pure battery cars? Yes they are cheap and Chinese still use them (but for how long?) as they are cheap, but you know specific energy is pathetic. They are yesterday’s technology. Maybe satisfactory for plugin hybrids and buses, but that is all. Cobalt as nickel byproduct is about 30% of cobalt supply. World nickel production is around 1,800,000 tons. Cobalt production is just 125,000 tons, 30% of it is 37,500 tons. So you are still way too short of cobalt even with this Tesla specific proportion of nickel/cobalt use, and even assuming every nickel mine can supply cobalt. No nickel mine is going to undercut prices of their main product for the sake of supplying byproduct, that is the whole issue. Cobalt demand will not do anything to increase production of cobalt as byproduct, zero, nil. Sure new cobalt-only mines will open. But not before long term cobalt price average will skyrocket to make investment into new mine opening worth the risk. And it doesn’t happen overnight. Checking the numbers now, only 3% of cobalt production is from primary cobalt operations: http://www.mmta.co.uk/cobalt-market-overview Production will need to grow from these tiny… Read more »

Realistically, if the availability of cobalt becomes a bottleneck, battery makers will simply switch to alternative chemistries, some of which have already been demonstrated, but aren’t being used simply because cobalt is currently easier to use. Historically, that’s how markets usually react to shortages in materials.

The alarmism about cobalt supply is typical of the FUD spouted by zzzzzzzzzz and his fellow anti-Tesla fraudster stock manipulators; you can find that garbage every day on Seeking Alpha.

Quoting from a Green Tech Media.com article:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Rebecca Gordon of CRU states in a 2015 piece that several R&D efforts for new and improved batteries “are well advanced and are not planning on using cobalt, so the concern is that if one or two [of these non-cobalt battery] projects come to market in the next two to three years, Tesla could switch from cobalt to one of the other chemistries relatively easily.”
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

http://www.greentechmedia.com/articles/read/Can-Cobalt-Supplies-Scale-With-Massive-EV-Market-Growth

Yes, I read this blob. It just like many Musk worshiper pieces – idiotic attempt to present your wishes for reality, ignoring any facts or numbers. It uses word “byproduct” once in the article, but obviously author has hard time understanding what this word means, talking about cobalt supplies when there are no cobalt-only supplies or reserves, except maybe small amount of 5,000 tons at Bank of China. The facts are that commodities are already in a slump for a while, right now, in 2016. Just check 5 year nickel price graph. 70% of nickel mines operate at loss, some of them are just closing until nickel price recovery. The same is happening with cobalt supply regardless of cobalt demand – cobalt is just byproduct that creates tiny fraction of copper or nickel mine income, who cares about it at current prices. You would need maybe some 100x cobalt price increase to bring these mines back into production and move cobalt from byproduct to main product status, that is product which production is sensitive to demand. Not going to happen easily when battery makers assume give-away cobalt prices for granted and elastic supply. Yes, you will be left with alternative… Read more »

How about re-training coal miners and oil workers to be lithium and cobalt workers?

Lets Not forget….,Old Lithium Batteries can be Recycled .Ha Ha !..Unlike Fossil fuels…..L M A O..There are many other ways to extract lithium doesn’t necessarily need to be mined…the oil BS’ers are at it once again…They just keep on throwing BS at us as usual ,in hopes that the ignorant will believe them .. ENOUGH!

Why do I have to a pay an oil recycle fee when changing the oil, then? I don’t think the Kosh Brother are paying to spread false Lithium stories…Keeping gas prices low has proved an effective way to keep ICE vehicles popular…

Even worse, turns out there is a limited supply of electrons. If you take a significant number of them and store them in batteries, the earth will acquire a significant positive charge. Since that leaves the moon relatively negative by comparison, the two will attract each other, and the moon will crash into the earth ending all life on the planet.

LOL

Heisenberghtbacktotherootsandnuts

Nice one!

I hope big oil jumps on that argument…

I see their followers running around looking up every two seconds in constant fear that they will be hit by the moon!

Let me add that it took me quite some seconds to think twice… I even looked up to the moon (which right now looks beautiful besides the milky way… (side kick to those who can’t see the milky way ))

Back to topic. Battery prices are on their way down. There will be (short) spikes, but in the long run we will wonder what that fuss was all about.

Demand goes up for sure, not only for ess vehicle and classic applications. I like my all electric chainsaw. And my neighbours (all die hard non electric chainsaw fans) start to like it too. Next is the lawn mower (unless I buy some sheep)

That said, demand goes up, so does reliance, price for a while and then production. As pushme pullyou said:

Nothing to see here! Move along!
(or better have fun laughing at big oil and the likes… )

+1 by loooong 🙂 😀 🙂

Haha! Nice. 😀

OMG we’re doomed! 😉

+1

Seawater has 0.1 ~ 0.2 ppm Lithium, plenty for all vehicles on the planet. Elon knows this! Economically extracting and separating the Lithium from other minerals (Sodium 10,000 ~ Magnesium 1,200 – Sulphur 900 – Calcium 400 ~ Potassium 380 ppm) is the challenge, but you can bet there are companies around the world working on Lithium extraction from seawater at this very moment…

Given the incredible progress Israel has made with their desalinisation plants, I wonder if the briny byproduct could be refined to harvest lithium and other products.

There are plenty of research on this. Japanese have developed membrane to filter lithium from seawater:
http://www.miningweekly.com/article/over-40-minerals-and-metals-contained-in-seawater-their-extraction-likely-to-increase-in-the-future-2016-04-01/rep_id:3650
It is early development yet, years from production.
Funny though that people focus on something that is in Lithium-ion battery name only, and have no clue about much more important components that are not in the popular name :/

Australia is the key in the lithium market. If there is a price rise it will be short lived. The mentality here is dig it up as cheaply as you can and sell as much of it as you can. Australia will flood the lithium market just like they have flooded the iron, coal and lng markets. They are already probably ramping up production even on the modest rises already seen in price.

The picture here is missing a huge source of BRINE. It is sea water. Granted that the parts per million in sea water is less than other sources, but there is no cost for sea water. And the total amount in the sea water is by far more than all other sources.

Besides I don’t see what the hype is all about; the amount of Lithium in any electric car is so small that if the cost of lithium doubles it will hardly make any impact on the final price of the car. An extra option of a metallic color will cost more.

“hotter then gold”

If it goes up, it will just encourage more suppliers get into production eventually will lower the price…

It is the never ending cycles of commodities mining business.