SHANGHAI, Jul 20 (SMM) - In the second half of 2022, the lithium carbonate market will maintain a slight supply deficit, and the gap between supply and demand will gradually enlarge approaching the end of the year. In the fourth quarter of 2022, the spot prices of lithium carbonate may rise further.
I. 2022-2026 Global lithium salt supply and demand balance analysis and lithium price forecast
In 2022, the total global sales of new energy vehicles is expected to be 10 million units, a year-on-year increase of 54%. By 2026, the total sales are expected to reach about 25 million units, with a 4-year compound annual growth rate of 26%.
SMM predicts that the global sales of new energy vehicles will reach about 10 million units in 2022, a year-on-year increase of 54%.
Driven by the domestic policy support, the improved positioning and investment of battery companies and car companies, as well as the increasing acceptance of new energy vehicles by consumers, it is expected that the total global sales of new energy vehicles will reach more than 25 million units by 2026, with a compound annual growth rate is 26%.
Global lithium battery market demand will grow quickly, especially power battery and energy storage battery
According to the current development of the global lithium battery market, SMM predicts that from 2022 to 2026, the global lithium battery market demand will grow significantly, especially power battery and energy storage battery.
From 2022 to 2026, the compound annual growth rate in the power battery market will be about 37%, the energy storage market 49%, and the consumer market about 16%. Global supply of lithium resources are estimated to increase 43% in 2022, mainly contributed by brine lakes and spodumene. Most of the increments will come from the expansion of existing projects, and the supply from new projects is limited.
Based on the distribution of global lithium resource supply in 2021 surveyed by SMM, 40% of lithium resources come from Australia, 24% from China, 24% from Chile and 6% from Argentina.
SMM estimates that by 2022, the global supply of lithium resources will be about 830,000 mt of lithium carbonate equivalent (LCE), an increase of 43% year-on-year, mainly contributed by spodumene and brine lakes. Most of the increments will come from the expansion of existing projects, and the supply from new projects is limited.
Global spodumene projects and distribution 2023-2026
By 2026, the total global output of spodumene concentrate is expected to reach more than 1.1 million mt of LCE, of which the output in Australia will account for as much as 52% of the total, Canada 13%, Congo (DRC) 10%, and China 4%.
2023-2026 Global brine lake projects and distribution
In terms of brine lakes, SMM predicts that by 2026, the total global brine lake production will reach more than 700,000 mt of LCE, with Chile and Argentina contributing the most. China's brine lake production is expected to account for 21% of the world’s total, ranking third.
From 2021 to 2026, the compound annual growth rate of global lithium resource supply will reach 31%. The concentration rate of resource supply will decline, and from the perspective of raw materials, the recycling sector is poised for significant growth.
SMM predicts that the recycling industry will account for 6% of the lithium resource supply in the future.
Short-term vs. long-term forecast: The mismatch between supply and demand is still in pace in 2022, and the price has already peaked. In 2023-25, the additional production brought by new overseas mines and brine lake projects will weigh on the prices. The supply surplus of lithium carbonate is expected to correct in 2025 and onwards with the drastic development in the energy storage market.
SMM predicts that in 2022, global lithium-based raw materials will still be in short supply, amid slow commissioning progress of lithium mines and the robust new energy market, and it is expected that the prices of battery-grade lithium carbonate will rise sharply.
From 2023 to 2025, as new overseas mines and brine lake projects are put into production with rising output, it is expected that the prices of lithium carbonate may show a downward trend.
By 2025, driven by the drastic development in the energy storage market, lithium carbonate prices may stop falling and rebound with the production grow slowing down.
II. 2022 China lithium salt supply and demand balance analysis and lithium price forecast
Historical price trend of lithium salt: Easing pandemic situation has put an end to the previous lithium price hike, while the prices of lithium salt have rebounded slightly recently. What will be the subsequent price trend?
According to SMM Price, the rapid upward trend of lithium prices has finally paused since late March 2022. On the one hand, due to the impact of the pandemic, the operation of terminal players and battery companies was seriously affected. At the same time, the high nickel prices also contained the demand for ternary cathode materials. In addition, high inventory was also a major cause for the pause of lithium salt price hikes. After the rush to produce at the end of the previous year, the demand contracted, resulting in lower operating rates of material factories and less demand for lithium salt. SMM statistics show that China's total output of lithium carbonate in June was 31,734 mt, a year-on-year increase of 40% and a month-on-month increase of 9%.
China lithium carbonate output stood at 31,734 mt in June, up 9% MoM and 39% YoY. Newly commissioned capacities ramped up the production in June, and the recycling volume also rose palpably driven by rebounding lithium prices. However, some companies were affected by the shortage of ore and the overhaul of production lines, and the overall supply level rose only slightly.
In the second quarter of 2022, the demand for lithium carbonate surged 39% year-on-year, of which the power battery market was still the largest application filed. And the demand from the LFP sector skyrocketed 112% YoY in the second quarter. Electronics and e-bike battery market remained muted.
Lithium carbonate was in supply deficit at the beginning of 2022 amid falling imports. The market was then in short-term supply surplus in the second quarter of 2022 with the recovery of production in Qinghai as well as sluggish demand amid resurging pandemic. In the second half of 2022, the market is expected to experience narrow supply deficit most of the time, with deficit deepening approaching the end of the year.
In the second half of 2022, the lithium carbonate market will maintain a slight supply deficit, and the gap between supply and demand will gradually enlarge approaching the end of the year. In the fourth quarter of 2022, the spot prices of lithium carbonate may rise further.
In the second quarter of 2022, lithium hydroxide demand rose 35% year-on-year, of which demand from the ternary cathode battery sector added 66% year-on-year. At the same time, with the on-going global transition to high-nickel batteries as well as the rapid development of LFP batteries through cost advantage, the transition process has been accelerated.
Driven by low supply and active demand, the lithium hydroxide market was in increasingly palpable supply deficit from the fourth quarter of 2021 to the first quarter of 2022. The market was then in short-term supply surplus in the second quarter of 2022 with rising demand and weakening demand. But the balance is expected to reverse after the demand side picks up in the second half.
In the fourth quarter, domestic and overseas demand is both expected to grow quickly as market players are eager to catch up with their annual targets, and the supply deficit is expected to deepen.
SMM expects further lithium hydroxide price hikes in the fourth quarter of 2022.
![Revue hebdomadaire du marché du carbonate de lithium : du 31/08 au 03/09, les prix au comptant du carbonate de lithium ont d'abord augmenté puis baissé, tendance globale à la baisse [Revue hebdomadaire SMM]](https://imgqn.smm.cn/usercenter/PPLUj20251217171727.jpg)
