Lithium Supply and Demand

Lithium is in demand in a wide range of sectors worldwide. Last year, total consumption estimates are over 170kt LCE. (Batteries had the largest share at 32%, followed by ceramics and glass at 27%.) Prior to 2015, ceramics and glass had the largest demand, but electric vehicle sales growth in 2015 resulted in batteries becoming the highest demand sector. While many commodities struggle for consumption growth, lithium demand had an estimated growth of 8% YoY and has a forecasted 9% CAGR to 2021.

Going forward, battery demand from electric vehicles (and other rechargeable batteries to a lesser degree) is believed to drive lithium demand growth at 17% CAGR to 2021, when batteries will account for just under half of all lithium demand worldwide. (Source)

From The Economist in Jan 2016, "...worldwide sales of lithium salts are only about $1 billion a year. But the element is a vital component of batteries that power everything from cars to smartphones, laptops and power tools. With demand for such high-density energy storage set to surge as vehicles become greener and electricity becomes cleaner, Goldman Sachs, an investment bank, calls lithium 'the new gasoline'...

"The industry is fairly concentrated, which adds to the worry. Last year Albermarle, the world’s biggest lithium producer, bought Rockwood, owner of Chile’s second-biggest lithium deposit. It and three other companies—SQM, FMC of America and Tianqi—account for most of the world supply of lithium salts, according to Citigroup, a bank. What is more, a big lithium-brine project in Argentina, run by a joint venture of Orocobre, an Australian miner, and Toyota, Japan’s largest carmaker, is behind schedule. Though the Earth contains plenty of lithium, extracting it can be costly and time-consuming, so higher prices may not automatically stimulate a surge in supply."

Projection of Worldwide Lithium Demand - 2015 to 2025

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Performance of Lithium - 2009 to 2016

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Production Capacity of Lithium-ion Batteries to 2020

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Lithium Price Forecast - 2015 to 2025

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Lithium Properties for Joint Venture

Lithium Properties

Lithium (Li) is an alkali metal element with atomic number 3 and atomic weight of 6.94. Lithium metal is produced through the electrolysis of fused lithium chloride, which results in a soft silvery-white lustrous metal. The metal is so soft that it can be cut easily with a knife. Lithium is the least reactive of all the alkali metals, but is still highly reactive. It must be stored under liquid paraffin to prevent oxidation. Lithium is highly reactive when in contact with water, forming hydrogen gas and lithium hydroxide (LiOH) in an aqueous solution. When in contact with air, the lithium metal is also highly reactive, forming a layer of lithium hydroxide.

Third Party Reports

Macquarie Research - 31 May 2016

Curtin University - 4 March 2016

Euro Pacific Canada - 14 Aug 2013

Lithium demand expected to outstrip supply

100,000 TONNES OF NEW LITHIUM CARBONATE EQUIVALENT (LCE) NEEDED BY 2021

Source: Nemaska Lithium

Lithium Applications

Lithium is widely known for its applications in energy storage for consumer electronics and large-scale energy grids, but many lesser-known applications make lithium an even more versatile mineral:

Glass

Lithium minerals (often spodumene) are used in the production of glass products such as containers, bottles, fiberglass, glass for pharmaceutical applications, shock-resistant cookware, sealed-beam headlights and many more. Benefits of lithium in glass production:

  • Reduces viscosity and melting temperature
  • Less energy consumption (because of lower melting temperatures)
  • Increased life and productivity of glass furnaces without sacrificing glass quality
  • Improved strength of glass
  • Improved thermal shock resistance of finished products
  • Reduced rejection rates and increased quality by reducing the amount of "bubbles"
Ceramics

Lithium minerals are used in ceramics to produce fritz and glazes, porcelain enamels for bathroom fixtures, shock-resistant ceramics and porcelain tiles. Benefits of lithium in glass production:

  • Decreases the melting temperature of ceramics by increasing fluxing power
  • Decreases thermal expansion co-efficient, increasing shock resistance
  • Decreases pyroplastic deformation
  • Improves glaze adherence, gloss properties and stain resistance
  • Improved resistance to sudden temperature changes
Lubricant Grease

Lithium greases make excellent lubricants as they adhere particularly well to metal, are highly water soluble and offer consistent properties over a range of temperatures. Lithium containing greases have been in existence since the 1940s and were perhaps the first large-scale commercial application of lithium compounds. Lithium grease is commonly used as lubricant in household products and in a number of demanding service applications in the automotive, military and aerospace industries, and accounts for about 65% of the lubricant market

Metallurgy
  • Lithium compounds reduce the flux melting temperature and surface tension of steel alloys
  • Lithium compounds degasify and clean metals, including aluminum, copper and bronze
  • Lithium carbonate is used in the aluminum industry
    • 1.5–4% kilograms of Li2CO3 per tonne of aluminum produced, during metal processing
    • Lithium lowers the melting temperature of the molten electrolyte and increases the cell's electrical conductivity
    • Decreases processing costs, particularly energy costs
    • Can be used to produce an aluminum/lithium alloy, increasing stiffness up to 7%, increasing strength up to 30%, and reducing weight about 5%

Other Applications

Lithium has many more applications, such as:

  • Lithium Metal
  • Air Conditioners
  • Optics
  • Organic and Polymer Chemistry
  • Military
  • Nuclear
  • Medicine

Top Lithium Producers

The four major producers of Lithium globally:

Chile

  • Producers: SQM & Albemarle
  • Chilean government recently authorized Albemarle to increase production capacity
  • Partial lift on the moratorium on issuance of new permits announced
  • Possibly two new exploration permits to be issued to Codelco

Argentina

  • Producers: FMC & Orocobre
  • Orocobre still in commissioning phase; should reach capacity by end of 2016

Australia/China

  • Producer: Talison & Chinese Transformers
  • Talison jointly owned by Tianqi Lithium (51%) & Albemarle (49%)
  • Tianqi currently at maximum transformation capacity
  • Mine output capacity increase unlikely for a few years

Source: Nemaska Lithium