Current situation and Prospect of Global supply and demand of Lithium Resources [Institutional Review]

Return to Origin: characteristics of Lithium Resources

Lithium is the metal element with the lowest standard electrode potential, the largest electrochemical equivalent and the lightest in nature, so it is a natural battery metal with long-term demand rigidity.

The global resources of lithium are abundant, which can shoulder the important task and support the global large-scale power and energy storage application, but the premise is to build a complete and resilient supply system.

The total amount of resources is abundant ≠ immediate production capacity is abundant, high-quality lithium resource projects with large-scale accumulation, high grade and easy to be exploited are scarce, and the global distribution is uneven.

In addition to the resource endowment, the lithium extraction process also has an important impact on the cost of a low-grade mine, and the development potential of various lithium extraction technologies is still great for a new mine.

Battery-grade lithium compounds and lithium deep processing are not fully homogenized commodities, and downstream power batteries have strict requirements for quality and consistency.

Demand side: rising and strengthening, the development of global new energy vehicle industry has passed the inflection point.

2.1 carbon Neutralization and carbon Peak: from Global consensus to Global Action

With the electrification of energy consumption and the cleanliness of electricity production, the world is ushering in an era of transformation from fossil fuel dependence to clean and renewable energy.

New types of energy storage, such as electrochemical energy storage, chemical power supply represented by lithium system is the basic equipment in the green reform.

In addition, the dual-carbon goal will also have a profound impact on the future global cycle, the trend of the global supply chain, as well as the thinking of process design.

2.2 the development of the global new energy vehicle industry has passed the inflection point.

In 2021, global sales of new energy vehicles were 6.75 million (penetration 8%), an increase of 112% over the same period last year, while sales of new energy vehicles in China were 3.52 million (penetration 13%), an increase of 158% over the same period last year.

Global sales of new energy vehicles in 2022 were 9.97 million (penetration 12%), an increase of 45% over the same period last year, and 22.32 million in 2025 (penetration 25%).

China sold 5.32 million new energy vehicles in 2022 (penetration 19%), an increase of 51% over the same period last year, and 11.25 million in 2025 (penetration 40%).

2.3 Historic global demand opportunity for lithium power industry

We expect the global installed demand for power batteries to be 472GWh in 2022 (an increase of 51% over the same period last year), 1120GWH in 2025, and 3005GWH in 2030.

As the second growth curve, we predict that the global demand for lithium batteries for fixed energy storage will reach 392GWH in 2025.

From 2023 to 2024, the global lithium demand is expected to enter the TWh era (the output will arrive ahead of schedule). The trend of the overall demand is clear, and the debate only lies in the global market share and pattern.

Given the concentration of the market, the capacity expansion of most lithium materials (especially positive electrodes) in the middle reaches will be even greater than that of downstream batteries.

2.4 the global lithium production capacity of "bayonet see red" is striving to get the share of key raw materials available to the supplier.

According to incomplete statistics, the global lithium power production capacity planning has reached 4725GWhby 2025, and its Chinese enterprises have reached 3900GWhs.

Giant 2025 capacity planning: CATL (~ 735GWh), LGES (427GWh), Panasonic (220GWh), SKI (200GWh), BYD (23 years 430GWh);

The construction of the supply chain system of key raw materials is becoming more and more critical, which is the key basic premise to stabilize production and achieve share.

2.5 quantitative measurement of lithium demand: explosive growth in terminal demand and further pro-cyclical magnification

Global lithium demand in 2021 is 510000 tons of LCE (53% year-on-year increase), and inventory-adjusted lithium demand is 610000 tons of LCE (59% year-on-year growth).

Benchmark forecast: the global lithium demand adjusted by stocks will be 750000 tons in 2022. LCE, is expected to reach 1.6 million tons in 2025 and 3.92 million tons in 2030.

The real "battery metal": in 2021, the power battery sector accounted for 48% of the terminal demand for lithium resources, and the overall demand for lithium batteries accounted for 76%.

Pro-cyclical magnification of demand: terminal demand + necessary inventory in supply chain + bottom inventory + desirable inventory = actual procurement demand