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[March 2009]
New Report from Roskill Analyses Worldwide Lithium Supply & Demand
A new Roskill report says that lithium consumption, driven primarily by the battery sector, experienced growth of >8%py between 2003 and 2007. The lithium market is not, however, immune to the global economic downturn and total consumption in 2008 was only 4% higher than the proceeding year. Total consumption in 2009 will probably be similar to, if not lower than, 2008, with consumers both reducing purchases and running down inventories.
Tightness in available brine production capacity in South America in the mid-2000s, and problems with ramping-up production from brines in China, prompted a rejuvenation of the conversion of lithium minerals to compounds. Prices responded accordingly, with lithium carbonate rising from US$2,000/t in 2004 to just under US$5,500/t in 2008, reflecting the higher costs involved in the mineral conversion process and the raw materials required.
Global GDP and industrial production are expected to enter a recovery phase in 2010/11. Roskill forecasts that demand for lithium will pick up in 2010 and quickly return to a strong growth trend. Current lithium producers are well-placed to supply the world’s lithium needs for the period to 2013 and beyond. The major lithium brine producers in South America are planning capacity expansions and the potential for increased production and improved product quality from brine-based lithium producers in China cannot be ruled out. Potential new producers of lithium compounds from minerals can expect strong competition from lower cost brine sources of lithium and it is possible that existing supply from lithium mineral conversion in China may decline, particularly if prices come under pressure as growth in demand stagnates.
The recent large increases in lithium consumption have come both from traditional and high-tech applications. The major industrial markets for lithium – ceramics and glass, greases, aluminium and rubber – are widely used in both construction and in the manufacture of consumer and industrial goods, market segments that have benefited from high levels of industrialisation and urbanisation in developing countries, particularly China. Growth in demand for lithium in these end-uses will improve in line with GDP, which is forecast to recover from 2010/2011. With the ongoing drive to reduce energy demand and decrease CO2 emissions in basic industries, consumption of lithium in ceramics, glass and aluminium could benefit from regulatory controls given its use as an energy-saving additive.
Although tempered by current low oil prices and declining sales of existing models, legislation to reduce CO2 and particulate emissions will see demand for hybrid and electric vehicles increase in the early-2010s, aided by fiscal stimulus packages. Most of the major automotive manufacturers are now in the late stages of development and/or early production of lithium battery powered hybrid and electric vehicles. Production of large, high-power, lithium batteries used to power the latest generation of hybrid and electric vehicles is forecast to increase markedly from 2010.
Demand for lithium in portable batteries for consumer goods such as mobile phones and laptop computers is also expected to show strong growth in demand over coming years, although growth will be considerably less than the >20%py increase seen in the mid-2000s because of lower consumer confidence in the current economic climate. Other areas of growth for lithium are in the synthesis of pharmaceuticals and fine chemicals and, perhaps towards the mid-2010s, from aluminium-lithium alloys for aerospace.
The Economics of Lithium (11th Edition 2009) is available at £2400 / US$5000 / €4000 from Roskill Information Services Ltd, 27a Leopold Road, London SW19 7BB, England.
ENDS