I also recommend reading
@8horse commentary (
37861483).
What is clear is that the US completely missed the boat when it comes to securing internal supply of battery materials. These are now classified strategic elements. And several recent senate hearings are dealing with this oversight. Asia is way ahead of the US through strategic acquisitions and JVs over the past 5-8 years. US/Canada Oil must be pooping their pants when Europe and Asia seriously start divesting from this sector and money starts flowing into the renewable energy sector.
For your convenience I copy&pasted 8horse's post below:
By 2030,
Goldman Sachs predicts China could supply 60 percent of the world’s EVs.
Lithium oversupply would end in about two years while electric vehicles adoption accelerated, imo.
Iron ore experienced boom and bust, small players were forced to exit, and now iron ore price is trading three times of large iron ore miners’ cost. Every metal price won’t sustain at lower than its industry average production cost.
China iron ore imports accounted for 76% of their total supply.
China lithium imports accounted for 85% of their total supply last year.
Currently lithium demand is relatively small, what will happen while China electric vehicle adoption accelerates? Will Lithium Triangle and WA (almost all future production are being taken by few automakers and battery producers) be enough? India is looking to secure their future lithium supply.
China Rushes to Dominate Global Supply of LithiumBeijing’s race to control supplies of lithium, used in powering electric cars, is leaving its rivals far behind.
By Yigal Chazan
February 23, 2019
China is increasingly dominating the supply of what’s been described as “white petroleum,” the soft, silvery metal lithium, seen as key to the momentum-gathering electric vehicle (EV) revolution.
Discoveries of lithium in North America and Europe may loosen China’s tightening hold on the market in time, but the race to find and exploit new deposits is also throwing up other concerns, namely the risk of oversupply or even a glut and political risks that may affect countries with some of the biggest reserves and production.
Lithium is one of the main components of rechargeable lithium-ion batteries used in smartphones, laptops, and EVs, with demand for the latter anticipated to surge over the next decade or so as manufacturing costs fall and environmental concerns rise. China, eager to reduce oil imports and address chronic air pollution, is driving production of EVs, accounting for 37 percent of passenger EVs sold globally since 2011,
according to Bloomberg. The
agency forecast in 2017 that by 2040 more than half of all new car sales will be electric vehicles.
Beijing government subsidies and quotas for EV sales appear to have incentivized efforts to corner the electric vehicle supply chain.
Reuters reports that Chinese entities now control nearly half of global lithium production and 60 percent of the electric battery production capacity. By 2030,
Goldman Sachs predicts China could supply 60 percent of the world’s EVs.
In recent years, China, the biggest global consumer of lithium, has been snapping up stakes in mining operations in South America and Australia, the principal global sources of the metal – derived from brine flats in South America and spodumene ore in Australia. In South America alone, China has
reportedly invested $4.2 billion in lithium deals in the past two years. It has also been tightening its grip on the supply of cobalt, another important lithium-ion battery component.
Beijing’s buying spree has worried electric battery- and EV-makers in Japan, South Korea, and Europe. But China has not had it all its own way. In a recent reversal of fortunes, a German company beat off a Chinese challenge in Bolivia – which has one of the world’s largest reserves of lithium – to secure a deal to build a plant mining the country’s biggest deposit. Most of the output will go to Germany, which lobbied heavily for the deal that includes the construction of a rechargeable battery plant.
Yet, not to be outdone, and in a measure of its determination, Beijing quickly sought to secure a foothold in Bolivia with a mining venture in another promising prospect in the country. The Chinese ambassador to Bolivia described the preliminary deal as “historic.” That came just weeks after one of China’s leading miners, Tianqi, completed the purchase of a 24 percent stake in neighboring Chile’s lithium producer SQM, fending off local opposition to the deal – centered on concerns it would unfairly favor the Chinese in the contest to secure resources for EVs.
China’s increasing domination of the global lithium supply appears to have prodded the Europeans and the Americans, whose EV markets are still very much in their infancy, to explore closer to home.
Deposits in Germany, the Czech Republic, Portugal, and Sweden have been the focus of attention, while some within the industry have expressed hopes that Canada might have sufficient volumes to meet demand in North America.
But the race for supplies has sparked concerns about the pace of production output. Extraction has been fueled by soaring lithium prices, which
more than tripled in the three years to 2018 to over $20,000 per tonne. The data and analytics company
GlobalData predicted in September that EV demand will double global lithium production from 26,700 tonnes in 2018 to 58,300 tonnes in 2022. In August, Macquarie Research suggested that the market was
“sleepwalking into a tsunami of oversupply.” Then in late November, Moody’s Investor Services
warned of excessive production in the early years of the next decade, due to factors including a “heavy concentration” of new mines.
Oversupply left its mark last year when lithium prices in China nearly halved, a problem compounded by the government’s removal of some subsidies on EVs, which slowed sales. Some analysts believe the market will recover in the medium to long term as demand increases, but the risk is that the slough may discourage investment in new production, leading to shortages when prices pick up. Yet that may not be the only break on supply.
President Mauricio Macri of Argentina, a top lithium producer, has opened up the country’s economy, introducing market reforms and easing regulations, but his attempts to repair the economic mismanagement of his predecessors are misfiring, plunging the county into a financial crisis that forced him to go cap in hand to the IMF. His ratings have shrunk, raising the prospect of a populist victory in elections later this year. That might make life difficult for mining investors, especially if his reformist agenda is reversed.
While Bolivia has barely begun to export its lithium, it has huge potential as a supplier – potential being the operative word. The country’s left-wing leader, Evo Morales, recognizes the value of the resource to Bolivian economic prospects. But if he is re-elected in October, investors may be put off if interventionist policies introduced in other sectors are extended to lithium production.
It is unclear how China will deal with such challenges, but given its relentless pursuit of lithium, and the strategic importance it attaches to the metal, solutions will no doubt be found. In many ways, China’s embrace of green transport is a good thing, as it expands interest in the sector and spurs competitor nations to try to catch up in terms of their share of lithium supply and the rechargeable battery market. The danger is that they continue to lag behind, leaving China with a monopoly over what could soon become a mainstream transport sector.
Yigal Chazan is the head of content at Alaco, a London-based business intelligence consultancy. February lithium battery industry investment expansion eventsMarch 04, 2019, 16:24
business communitySina Finance APPThe grass grows in February and the lithium battery industry is busy. A month after the start of construction, a number of power battery industry chain enterprises have entered the hot-selling construction work. Among them, there are many power battery projects flashing in many large-scale centralized construction sites, involving power batteries and lithium battery materials. Initially, there were more than a dozen events in the lithium battery industry chain in February, and see below:
1. Chongqing BYD's annual production of 20GWh power battery project started.
On February 22nd, Chongqing BYD New Energy Automobile Battery Production Base and the “Yunba” project started in Chongqing Laoshan District. After the project is completed, it will become an important new energy vehicle battery production base in BYD.
It is understood that BYD's new energy vehicle battery production base project has a total investment of 10 billion yuan, builds 8 lithium-ion battery production lines, uses fully automated lithium battery production technology, produces core products such as power battery cells and modules, and develops related supporting industries. The project plans to complete the first phase of the project within one year and put into production. After completion, it will form an annual production capacity of 20GWh of power battery.
2. Qinghai Times New Energy 3 lithium iron phosphate production lines put into operation
Qinghai Times New Energy Technology Co., Ltd. 3 production lines of lithium iron phosphate power and energy storage battery production. The three production lines entered the site on January 3, 2019, and quickly completed the installation from equipment installation to commissioning and driving operations as well as power supply.
Qinghai Times New Energy is a holding subsidiary of Ningde Times (300750) and settled in Xining, Qinghai in 2012. Previously, Qinghai Times New Energy has completed the construction of one phase of two power and energy storage battery project production lines; this three production lines is one of the construction contents of the second phase power and energy storage battery project. At present, the annual energy production capacity of Qinghai Times new energy reaches 6.5. GWh.
3. ATL invested in an annual production of 450 million lithium battery projects
The new energy lithium battery packaging project invested by Dongguan New Energy Co., Ltd. (ATL) has a total investment of about 5 billion yuan. It mainly builds Pack and SMT plants, warehouses, R&D buildings, activity centers, dormitories, restaurants, etc. It is expected to be put into production. With an annual output of 450 million pieces of lithium-ion batteries.
4. Judian New Energy 3 billion solid polymer lithium battery project
On February 18, in the collective start-up activities of major projects in the Xuzhou Economic and Technological Development Zone in Jiangsu Province, the total investment was 3 billion yuan, and the solid-state polymer lithium battery project of Judian New Energy was started.The total investment of the project is 3 billion yuan, with an annual output of 1 billion ampere-hour single-capacity solid-state polymer power lithium battery, supporting the construction of energy storage power station. The first phase of the construction area is 100,000 square meters, with an annual output of 500 amps and a large capacity lithium battery of 400 million ampere hours. After the completion of the project, the annual output value will be 7.5 billion yuan.
5, Jiangsu Wuxi 8 battery, energy storage materials project
Recently, in 2019, the first batch of 301 major projects in Wuxi, Jiangsu Province, started construction, including several energy storage batteries and energy storage materials projects:
Vision power high energy storage high security flexible packaging smart battery project, linkage Tianyi lithium battery energy storage system project, China Jinjie electric energy storage, energy storage heating project, Aobo new energy supporting energy-saving products (including 200MWh lithium battery energy storage system production line) Project, positive electrode material project for spar lithium ion battery, high-performance lithium battery anode material project invested by Wuxi Foil Electronic Technology Co., Ltd.,
LGChem Automotive Battery Positive Electrode Material Project invested by LG Chem and
ZhejiangHuayou Co., Ltd. The second phase of the positive electrode material intelligent manufacturing (new photovoltaic power storage power station and other supporting facilities) project.
6. Xiangtan electrification project with an annual output of 20,000 tons of lithium manganate cathode material
The main project of the 20,000-ton high-performance lithium manganate battery cathode material project of Jingxi Xiangtan Electrochemical Technology Co., Ltd., a wholly-owned subsidiary of Xiangtan Electrochemical Co., Ltd., has been completed and entered the production stage. In the past three years, the sales volume of cathode materials for lithium manganese oxide batteries in Xiangtan Electrification has exceeded 40% annually. It has established cooperative relations with Qingdao Dry Transportation, Sandton, Zhongtian Technology and Hunan Shanshan Energy.
With the completion and commissioning of the project, the company's battery material segment has a total production capacity of 100,000-110,000 tons, which is conducive to enhancing the company's competitiveness and profitability, and has a positive impact on the company.
(Article source: High-tech lithium power grid)
Article Keywords:
Xiangtan ElectrochemicalLithium BatteryQinghaiOptimism returning to the lithium market following oversupply fearsLithium’s story for 2018 was marked with
fears of oversupply in a market where demand had yet to catch on. This bearish sentiment placed strong downward pressure on both lithium prices as well as
lithium stocks, dampening the lithium market outlook.
On the demand side, in 2018 automakers made several announcements about new electric vehicle (EV) models alongside rising sales, particularly in China. “We were originally too pessimistic about the sales of EVs and the lithium demand for EV production at the start of 2018,” Roskill Division Manager David Merriman told INN. “But with these factors in mind we have increased our demand forecast for lithium.”
The move by battery makers towards the production of high-energy batteries is another potential positive for the market. Higher amounts of lithium are required to improve range and performance in these rechargeable batteries. “That incentive to longer-range is beneficial to us and to the industry,”
said Eric Norris, President of Albemarle’s (NYSE:
ALB) lithium global business unit.
The strong supply/demand fundamentals in the lithium market couldn’t fully placate the bears and last year we saw a chasm develop between positive market signals and lithium stock evaluations. There has been a real disconnect lately between demand out of the EV and battery industries, and lithium mining stocks,
Chris Berry, founder of House Mountain Partners, told INN at Benchmark Minerals Week’s Cathode Conference. “My sense right now is that when we look back at 2018, it’ll be a year where valuations reset because there are some enormously cheap opportunities in the space right now based on all of the blood that’s been on the streets,” he added.
2019 to transition lithium market into stellar demand growthWhat’s in store for lithium in 2019? Most analysts are quite optimistic that this year will be one of transition for the lithium market, with 2020 and 2021 bearing the fruit of that transition with a chance for real growth in the space.
The industry’s biggest players also have a lot of optimism for growth in the near term. Albemarle recently released its
2018 earning results showing better-than-expected gains in its quarterly profits, with growth projected to continue in 2019. The company says it expects lithium demand to grow at a CAGR of 21 percent from 70,000 tonnes in 2018 to more than 650,000 tonnes by 2025 on stellar growth in the EV and utility-scale battery markets, pushing the total lithium market demand to over 1 million tonnes.
“The momentum around electric vehicles has started to accelerate,” said Scott Tozier, chief financial officer at Albemarle. Tozier also said the company was “not forecasting any significant macroeconomic headwinds and have not seen any decline in our customer demand forecasts.”
In response to the expected dramatic increase in demand, many analysts are forecasting an increase in mergers and acquisitions (M&A) activity in the lithium sector over the near-term. Major lithium companies are already making headlines with a recent surge in consolidation activity in the lithium market.
https://thediplomat.com/2019/02/china-rushes-to-dominate-global-supply-of-lithium/DYOR & GLTA.
