“After the price cut in 2018, lithium products will remain at a low price for some time, or return to a high point around 2025.” Li, chairman of Lubon Industry Co., Ltd., said at the Asian Battery Metal Seminar held on January 17.
| PVA 1788 (PVA BP17) |
With the release of new capacity, domestic battery-grade lithium carbonate prices fell all the way in 2018, offering only 77,000-82,000 yuan/ton in December, a drop of 53.3%. The price of lithium hydroxide fell slightly, but the December offer also fell 23.19% from the beginning of the year.
According to the statistics of Shanghai Nonferrous Metal Network (SMM), the new capacity of lithium hydroxide in China in 2018 totals about 355,000 tons, of which Ganfeng lithium industry and Ruifu lithium industry in Shandong have achieved mass production. Domestic lithium hydroxide production in 2018 is expected to be about 57,000 tons, an increase of 78.1% over last year.
According to the prediction of China Non-ferrous Metals Industry Association Lithium Branch, driven by power batteries, the global demand for lithium carbonate will increase from 265,000 tons in 2017 to 400,000 tons in 2020. However, considering that capacity growth is faster than demand growth, the global supply and demand structure of lithium products is reversing. It is estimated that by 2021, China will increase lithium production capacity by about 206,500 tons and the world will increase lithium production capacity by about 409,500 tons, but the global demand for new lithium products is only about 200,000 tons in the same period.
Huatai Securities believes that in 2019, the trend of lithium supply and demand pattern from balance to excess is difficult to reverse, and lithium prices have gradually approached industry costs.
“But excess is a short-term phenomenon, and lithium is scarce in the long run.” Liu Nanping said that historical data show that the price cycle of lithium products is about 10 years. With the rapid growth of demand and supply, this cycle may be shortened. It is expected that the price of lithium products will return to high prices around 2025. By then, the global demand for lithium carbonate may exceed one million tons.
| PVA |
Another industry insider, who did not want to be named, was more optimistic, arguing that the growth in demand for power batteries brought about by electrification in the transport sector would push lithium prices up rapidly in 2023.
The Ministry of Industry and Information Technology predicts that by 2020, China’s sales of new energy vehicles will reach 2 million, with more than 5 million vehicles in possession. According to the target of the medium and long-term development plan of the automobile industry, the annual sales of new energy vehicles in China will reach 7 million by 2025.
According to Haitong Securities’recent research report, global sales of new energy passenger vehicles are expected to reach 3.429 million by 2020, and the corresponding demand for lithium carbonate will reach 139.8 million tons.
Some industry analysts predict that the downstream demand for lithium carbonate will continue to grow at an average annual rate of 16% over the next five years. With the extensive application of high nickel batteries, the demand for lithium hydroxide will also increase rapidly. It is estimated that the composite growth rate of global demand for lithium hydroxide in battery field will reach 78% from 2018 to 2020.
According to Standard & Poor’s, lithium demand for electric passenger cars will increase by about ten times by 2025.
At present, it has been proved that the global lithium reserves are about 16 million tons and the resources are about 53 million tons. Mainly distributed in Chile, Argentina, Australia and other countries, of which China reserves about 3.2 million tons, resources about 7 million tons.
| POLYVINYL ALCOHOL |