SMM May 21:, Livent Corp. at the 2021 (sixth) China International Nickel-Cobalt-Lithium Summit Forum held by SMM Mr. Ashish Patki, the global product portfolio manager, expressed his views on the development of China's long-term lithium market.
The emerging trend of Global Electric Transportation and China's role in the long-term Development of Lithium Market
Over the past few years, China's domestic market has been in a clear leading position, and has shown two obvious characteristics: one is the high market proportion of new energy vehicles, and the other is the increase in battery size.
It is worth mentioning that the gap in battery demand between Europe and China has narrowed sharply in 2020, but plug-in hybrids in the European market account for a high share of electric vehicles.
In addition, according to data as of March 2021, the demand for new energy batteries in the Chinese market is expected to reach a record level. Recently, a well-known global carmaker predicted that China's new energy market could rival or even surpass the overall passenger car market in Europe or North America in the next decade. Regulations in various regions of China, as well as direct and indirect subsidies, will also continue to affect the growth of new energy vehicles.
This growth is likely to continue for a decade, and demand for all-electric passenger cars makes China still the largest market for batteries.
As for other electric transportation, electric buses and electric vehicles account for the main share. The battery replacement of these electric transportation equipment has the greatest impact on the current battery demand, and may become the main driving force of demand growth this year and in the next decade.
It should be noted that even though some of the world's leading automakers have recently provided high-quality batteries that meet the requirements of specific projects for each market segment before increasing production, it is even crucial to accelerate the adoption of electric driveline, but the decline in sales of its electric vehicle project is still inevitable.
China is expected to become the world's largest demand for fixed storage batteries within 10 years.
At present, China has taken up a large part of the world in installing battery capacity, which is enough to meet the needs of various fields of domestic electric transportation, even for export abroad. Manufacturers in Japan and South Korea say they will expand capacity in China to meet domestic and export demand. It is expected that more and more battery factories will be built in Europe and the United States in the next decade, while China may continue to maintain its
A global leader in battery installed capacity for transportation and non-transportation applications.
Up to now, the battery production of China's top five battery manufacturers has accounted for more than 80% of the world's total battery production, and over time, this concentration may lead to further consolidation of the industry in the future. Perhaps in the near future, most of the world's portable electronics, appliances and equipment, as well as components, including lithium batteries, are made in China, and these supply chains are expected to remain in China, and their demand growth is expected to be higher than that of GDP. China's demand for fixed storage batteries is expected to overtake that of the United States and Europe and is likely to become the world's largest demand country in the next decade.
Global demand forecast
Overall, global demand for lithium chemicals is expected to increase by 75, 000 tons to 120000 tons in 2021. As China's demand grows faster than the rest of the world, its demand for lithium chemicals is expected to more than double between 2021 and 2020 and continue to double between 2025 and 2030.
China will remain the center of long-term demand for lithium chemicals. It is worth mentioning that the increased demand for lithium chemicals will require sustained investment in order to expand existing resources as well as capacity for new resource development and chemical conversion.
Since the second half of 2019, the industry-wide lithium expansion project has been postponed. Industry analysts agree that the challenge for the lithium industry is how to develop sufficiently qualified materials engineering and the large amount of capital needed to develop and expand new raw material processing and conversion plants in the medium term. After all, there is no doubt that, according to the current situation, the operating cost of the next wave of resources will be higher than that of current resources.
The price of lithium carbonate in China has doubled since 2021, and the price increase is evident in lithium hydroxide, and even SMM expects the tight supply of lithium hydroxide to continue.
But it is undeniable that China will become the world's largest market for automotive batteries, cathode materials and cathode materials, as well as lithium chemicals.
