Recap of Global Lithium and Cobalt Output in 2021, Lithium and Cobalt Prices to Remain in Upward Trajectory in 2022

SHANGHAI, Feb 10 (SMM) - The United States Geological Survey (USGS) released preliminary statistics on the production of lithium and cobalt at global mines in 2021. The lithium production at global mines in 2021 was 100,000 mt (excluding the United States), an increase of 21% 2020. USGS believes that the increase in production was mainly due to strong demand in the lithium-ion battery market and rising lithium prices. Global lithium consumption in 2021 was estimated at 93,000 mt, up 33% from 70,000 mt in 2020. "Security of lithium supply has become the biggest concern for technology companies in Asia, Europe and the United States," the USGS said in its latest report.

USGS data showed that global cobalt production in 2021 was 170,000 mt, a record high, and an increase of 20% when compared with 142,000 mt in 2020. This growth in raw materials was primarily driven by increased production at existing mines, despite the commissioning of new mines and the resumption of production at closed mines. The Democratic Republic of Congo was still the world's largest cobalt producer, accounting for more than 70% of global cobalt production, followed by Russia (7,600 mt) and Australia (5,600 mt).

In 2021, the production and price increases of lithium and cobalt were much higher than expected. Looking forward to 2022, relevant institutions predict that the boom will continue.

CITIC Securities predicts that global lithium price will move upward in 2022 with the fading impact of pricing by major companies in South America under long-term contracts and the continuous upward trend of lithium concentrate prices. It is expected that the  lithium carbonate price in South America will rise to $25,000/mt in the first half of 2022, and the price of lithium concentrate in Australia will rise to more than $3,000/mt, and the price of lithium products in the Chinese market will remain high.

The rapid rise in lithium prices in 2021 has raised concerns about resource supply and cost control in the downstream of the industry chain. Integrated lithium producers with mine resources have the advantages of guaranteed supply and low cost.

In terms of cobalt, the cobalt industry will enter the third year of tight supply in 2022, which will lift cobalt prices up further. In 2022, the centre of cobalt prices is expected to be above 450,000 yuan/mt, an increase of more than 20% from 2021.