Lithium Market Snapshot

A Surging Battery Industry

Lithium Demand

  • Long term orders in China through the roof
  • Major lithium ion producers preparing for a 4-6 fold increase in cathode buying by 2020
  • Tesla will need to source lithium hydroxide from China initially

Lithium Economics

More than just Cars – Buses, Delivery Vehicles & E-Bikes;
Utility scale Energy Storage is a game changer

Projected Demand

  • 359K Metric Tonnes LCE (2020)
  • 534K Metric Tonnes (2025)
  • Over 150K tonnes new capacity needed

Consensus is for strong demand growth to 2030. Electric transportation is the primary driver.

The Market Needs Multiple Projects to Succeed

The “Big 3” supplied less than half the market in 2015

Suppliers

  • ALB will only add 20k tonnes of brine capacity before 2020
  • SQM’s situation in Chile is uncertain
  • FMC has outsourced carbonate supply

Conclusion

  • Higher cost China Spodumene “Converters” have kept the market in balance
  • Demand growth to 2020 requires another 150K Tonnes LCE
  • “Big 3” plus China unlikely to add more than 100K Tonnes
  • Investment needed ASAP to avoid supply imbalance