SMM4 22 month news: in the first three months of this year, the top lithium mine producers released quarterly and annual results one after another. The reports show that demand for lithium is on the rise.
Livent, another top producer, also expected revenue growth in 2019 due to higher sales and higher prices in the first quarter.
Ricardo Ramos Rodriguez, chief executive of Chilean Chemical Mining (SQM), said on a conference call: "demand unexpectedly grew by more than 27 per cent in 2018 and is expected to grow by more than 20 per cent in 2019. At this rate, lithium demand could reach 1 million tons a year in the near future.
Bloomberg New Energy Finance (BloombergNEF) also said that with the unstoppable trend of electric vehicles, demand for lithium carbonate and lithium hydroxide for lithium-ion batteries will continue to grow, and demand for lithium batteries will increase sixfold between 2020 and 2030.
At the same time, demand for electric vehicles remains strong, especially in China.
The China Association of Automobile Manufacturers expects sales of electric vehicles in China to reach a record 1.6 million this year, up from 1.2 million in 2018 and accounting for about half of global sales.
Bloomberg also reported that 486electric car manufacturers are now registered in China, more than tripling the number the year before. (related news: lithium use surges 76% in the global electric vehicle market)
But the current problem is that the supply of lithium at the mine end is difficult to meet such a huge demand, including financing.
Chris Berry, an expert at House Mountain Partners, said that although Chile's chemical mining industry and large enterprises plan to produce at least 1 million tons of lithium carbonate equivalent by 2025 to meet demand, it will be difficult to achieve this goal. "
If superbattery plants achieve full production, demand for lithium could increase more than eightfold to 961351 tons by 2023 and 1570020 tons by 2028, according to Benchmark Mineral Intelligence.
In February, Canadian company Nemaska Lithium announced a funding shortfall of C $375 million for its mining projects in Canada due to installation and indirect costs.
Andrew Miller, director of Benchmark Mineral Intelligence, said: "it is difficult to bring new lithium ore resources to market, both from a raw material point of view and from a chemical conversion point of view. This is reflected in the recent expansion of Chilean chemical mining and Yabo. So in view of the actual risks that arise, investors will have higher requirements for the yields of bonds and stocks issued by the companies concerned. "
Simon Moores, chief executive of Benchmark minerals Intelligence, said: "the growth rate of lithium supply may be limited, and only increased investment in the market can improve the current situation of tight supply of lithium mines."
Due to tight supply, by the beginning of the second quarter of this year, companies had already begun a raw material dispute, such as Volkswagen, a big carmaker, and Ganfeng Lithium, a top lithium producer.
Ganfeng Lithium, China's largest lithium producer, has invested $160 million in developing the Cauchari-Olaroz project in Argentina and has formed a joint venture with lithium Americas in the United States. The project is one of the largest lithium brine water resources in the world, with a total of 17977200 tons of lithium carbonate equivalent. Once the Cauchari-Olaroz project is put into production, it is expected to have a target production capacity of 40, 000 tons of lithium carbonate per year. ("related news: Ganfeng Lithium Industry has spent more than 1.2 billion to increase its holdings of lithium products.)
The supply of lithium has also been affected by a series of disruptions. In South America, for example, lithium producer Orocobre has lowered its 2019 production target due to torrential rains in the first quarter.
Of course, there is still some positive news. For example, Altura Mining announced that its Altura lithium mine and Pilbara Minerals lithium mine have begun production.
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