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[Conference Takeaway] China International Lithium and Cobalt Industry Chain Development Forum
Jul 22, 2022 16:05CST
Source:SMM
According to SMM statistics, the Chinese cobalt market was in a state of short supply in the fourth quarter of 2021, but began to shift to a supply surplus in the first quarter of 2022. SMM attributes the oversupply in the first half of 2022 to falling demand under the influence of the pandemic and volatile nickel prices, and increased supply.

SHANGHAI, Jul 22 (SMM) - The 7th China International New Energy Conference 2022, hosted by the SMM (Shanghai Metals Market), has come to a successful end last week. Over 2,000 industry experts and guests participated in the conference, and people provided their perspectives on a variety of topics regarding the most recent trends in the new energy industry, including new energy batteries and their materials, power battery recycling, new energy equipment, and technologies as well as international new energy industry chain.

Speech topic: Global cobalt supply & demand and price outlook 2022-2026

Speaker: Tang Peng, Chief Cobalt Analyst of SMM

According to SMM statistics, the Chinese cobalt market was in a state of short supply in the fourth quarter of 2021, but began to shift to a supply surplus in the first quarter of 2022. SMM attributes the oversupply in the first half of 2022 to falling demand under the influence of the pandemic and volatile nickel prices, and increased supply.

In May 2022, the Chinese cobalt market was in a supply surplus of 982 mt in metal content.

Due to rapidly growing demand from NEVs and disrupted cobalt supply, cobalt sulphate market was in a tight balance.

Precursor for cathode active materials is the main driving force for the growth of cobalt sulphate demand. However, the increase in cobalt sulphate demand is expected to be constrained by the reduction of cobalt unit consumption due to the development trend of high-nickel NMC batteries.

In the second quarter of 2022, the cobalt demand from precursors increased steadily, with 6-series and 8-series NMC precursors accounting for a combined 31% of the total cobalt demand from NMC precursors. High-nickel NMC precursor is expected to become the mainstream precursor in the future.

The monthly output of Co3O4 showed a seasonal trend based on the performance of the downstream electronics market.

The production of LCO features distinctive off season and peak season. The output of LCO dropped 16% year-on-year in May 2022 as the electronics market entered the off-season.

Since the fourth quarter of 2021, the booming Chinese new energy vehicle market allowed the domestic cobalt prices to keep rising. However, starting from April 2022, cobalt prices fell back rapidly, and poor domestic cobalt demand affected the prices of the overseas cobalt-based raw materials. Recently, overseas refined cobalt prices and price coefficient of cobalt intermediate products continued to fall, allowing the price difference between domestic and overseas cobalt markets to improve.

Price forecast for cobalt products in China

Cobalt salt smelters who use intermediate products as raw materials currently report severe backlog of finished product inventories. With firm lithium carbonate prices, NMC battery scrap and LCO battery scrap made contributions to cobalt salt supply. In response to volatile cobalt prices, major precursor plants have increased their proportion of self-supplied raw materials recently, while the NMC power battery market was recovering slowly, leading to poor demand for cobalt sulphate. In the short term, the cobalt salt market will remain in oversupply, hence cobalt prices will still have room to fall in July and early August.

The prices of refined cobalt have stabilised for now. The domestic supply of refined cobalt increased in June, while demand from the alloy market remained sluggish, forcing major refined cobalt plants to lower their ex-factory prices. This, coupled with the decline in cobalt futures prices and overseas cobalt metal prices, sent the domestic spot refined cobalt prices lower to 350,000-360,000 yuan/mt. However, with supply and demand restoring to a balance over time, refined cobalt prices will bottom out.

Forecast for cobalt raw material supply & demand 2022-2025

SMM estimates that cobalt raw materials will be in short supply in 2022, but will shift to a surplus in 2023 and the oversupply situation will intensify year by year in the years leading up to 2025.

Speech topic: Global lithium industry development and price forecast 2022-2026

Speaker: Ma Rui, Chief Lithium Analyst of SMM

Global lithium salt supply-demand analysis and lithium forecast 2022-2026

In 2022, the global sales of new energy vehicles are expected to total 10 million units, a year-on-year increase of 54%. In 2026, the sales are expected to reach about 25 million units, with a CAGR of 26% from 2022 to 2026.

SMM predicts that the global sales of new energy vehicles will hit 10 million units in 2022, a year-on-year increase of 54%. It is expected that the total global sales of new energy vehicles will exceed 25 million units by 2026, with a CAGR of 26% driven by the support of national policies, the layout and investment of battery makers and car companies, and the increasing popularity of new energy vehicles among consumers.

Global lithium battery demand from NEV and energy storage sectors will witness significant growth from 2022 to 2026

SMM predicts that the global lithium battery demand from NEV and energy storage sectors will witness significant growth from 2022 to 2026. From 2022 to 2026, lithium battery demand from NEV, energy storage and consumer markets will register a CAGR of 37%, 49% and 16% respectively.

The upward trend of lithium salt prices came to an end under the influence of the pandemic, but the prices rallied slightly recently.

SMM data showed that lithium salt prices had stopped rising since late March 2022 as the pandemic hit end users and battery makers while alarmingly high nickel prices suppressed the demand for NMC materials. Besides, high inventory also weighed on lithium salt prices.

SMM data: China's lithium carbonate output stood at 31,734 mt in June, a year-on-year increase of 40% and a month-on-month increase of 9%.

China’s lithium carbonate output stood at 31,734 mt in June, up 9% MoM and 40% YoY. The new capacity of many smelters ramped up in June. Driven by the rebound of lithium prices, the output of smelters who use scrap increased significantly. However, some smelters were affected by ore shortages and the overhaul of production lines.

The Chinese lithium carbonate market was in short supply in early 2022, and this situation was compounded by the reduction in imports. However, the market shifted to an oversupply in the second quarter of 2022 due to growing supply and falling demand. The market will be in a small supply deficit in the second half of the 2022, and the supply gap may widen at the end of the year.

At the beginning of 2022, the Chinese lithium carbonate market was in a supply deficit, which was exacerbated by falling imports. However, the market shifted to a supply surplus in the second quarter due to output recovery in Qinghai and weaker demand caused by the pandemic.

SMM predicts that the lithium carbonate market will maintain a small supply deficit in the second half of 2022, and the supply gap will gradually widen at the end of the year. SMM expects that the spot prices of lithium carbonate will rise further in the fourth quarter of 2022.

Speech topic: Rational application of centrifuges in the production process of new materials

Speaker: Yan Guoliang, Technical Director of Xiangtan Huibo Centrifuge Co., Ltd.

Centrifuge classification

Centrifuge can be classified as decanter centrifuge and filtering centrifuge.

Application of peeler centrifuge in lithium carbonate separation (fine particles or powder)

The treatment process is as follows: the first dehydration is performed after feeding, the second dehydration is performed after washing. In the end, scrapings and solids are discharged.

The method for increasing the capacity of centrifuge: Increasing the filter area while keeping the thickness of the filter cloth unchanged.

Control System: To ensure smooth operation, each centrifuge is run in different process steps.

Peeler centrifuge that is specially designed for battery-grade high-grade manganese sulphate separation

It is used for the production of NMC materials for lithium-ion batteries, as well as LMO precursors, manganese-nickel materials and manganese-cobalt materials.

Separation features:

High temperature crystallization, high temperature separation; crystalline particles are sensitive to temperature; fluoride ion corrosion; high requirements on purity; low water content after separation; as less material spill as possible in the separation process

Speech topic: Adopt advanced lithium extraction technology and develop high-quality salt lake resources

Speaker: Ren Xiaohua, Chief Geologist of Tibet Summit Resources Co., Ltd.

With the rapid development of the global new energy industry, lithium has become a "key metal" and an important resource. The world's major economies, such as the United States, China, and the European Union, have taken lithium metal as their national strategy by promoting scientific and technological research and development in this industry.

Many countries are also expanding the footprint of lithium resource and processing around the globe. As lithium product producers are extending their industry chain to the upstream mineral resources, regions that are abundant with lithium ore have drawn the biggest attention ever.

Lithium resources and exploitation is the basis for the processing and application in the lithium industry

The global lithium resources are abundant but the distribution is unbalanced and the quality varies greatly

According to the United States Geological Survey and Summit Resources Centre, the global lithium resources are abundant, but the distribution is unbalanced and the deposit types, scale and quality varies greatly. The brine and silicate are the two major lithium ore types, which are mainly found in South America and Australia. Compared with hard rock lithium deposits, brine lakes have richer resources, are easier to explore and extract. There is not any bottleneck in extracting lithium from brines, which may be a threat for silicate-type lithium ores due to its cost advantage.

Speech topic: DuPont helps to solve the development and environmental protection challenges in the lithium industry with innovation technology

Speaker: Wucan, DuPont Water Treatment Marketing Manager, Greater

According to Wucan, China's salt lake system is facing the challenge that most of the salt lakes in China are with low lithium concentration and high Mg/Li ratio. The traditional evaporation process is complicated and inefficient.

The new technology based on adsorption and ion exchange can solve this problem. DuPont water treatment provides a complete, reliable and efficient solution of lithium extraction for customers, including adsorption, NF, RO and ion resin exchange technologies.

Speech topic: Challenges facing the global cobalt market

Speaker: Dr. Adam McCarthy, Chairman (Secretary-General) of the Cobalt Development Institute

The cobalt mine supply increased in 2021, mainly driven by the growth in the Democratic Republic of Congo. The supply may be the biggest factor that affects the sustainable development of the cobalt industry. The supply in Congo still has room for growth.

Demand for cobalt will continue to grow and is expected to exceed 300,000 mt by 2026. Such supply-demand dynamics is also reflected in the prices. Although the prices of cobalt fall recently, the prices have risen from 2021 to 2022 and are expected to remain high and stable in the future due to rising demand and limited supply.

In the medium term, prices will fall as supply grows.

On the whole, the outlook for cobalt prices remains bullish. As most of the demand for cobalt comes from the electric vehicle industry, cobalt still plays an important role in the battery value chain. In the medium and long term, more funds will be invested in the mining of cobalt. Prices of cobalt exported from Africa to China will remain high due to supply limitations. The pace of global investment will accelerate to meet the unfulfilled demand.

Speech topic: The development of global lithium ore resources

Speaker: Fu Xiaofang, Chief Expert of Provincial Key Laboratory

In recent years, the world's primary energy and carbon emissions have grown rapidly, highlighting the urgency of energy transformation. The global identified lithium resources amount to 53.85 million mt (USGS 2018 annual report). Among the lithium resources, brine lake system accounts for 59%, hard rock lithium ore 34%, and sedimentary lithium ore 6%. In addition, with the advancing of lithium resource discovery in various countries, the global lithium resources have increased significantly.

Global brine lake system

South American has more than 100 salt lakes in the wasteland covering more than 1 million square kilometres.

World-class super-large salt lake: Salar de Uyuni in Bolivia, Salar de Atacama in Chile, and Salar de Hombre Muerto in Argentina.

Chile has the world's second largest dry salt lake, which is located in Antofagasta Province, 2300 meters above sea level, with an area of 2,229 km2. Magnesium sulphate subtype lithium ore has an average depth of 360 to 400 metres, lithium concentration of 1000×10-6 to 4000×10-6, and reserves of 530×104 mt (in Li2O equivalent), accounting for 22.9% of the world. As the rainfalls were scarce, most areas have turned into dry salt beaches.

Argentina has more than 20 salt lakes distributed in north-west Pune.

China salt lakes:

There are more than 80 lithium-rich salt lakes in the Qinghai-Tibet Plateau, and Zabuye Salt Lake is the third largest in the world.

Most salt lakes in Qinghai are magnesium sulphate subtype, chloride type, sulphate type with all sizes, which have high Mg/Li ratio.

Chaerhan Salt Lake is located in the south of the Qaidam Basin, Qinghai province, with a total area of 5,856 square kilometres. It is the largest magnesium sulphate salt lake in China. It is mainly composed of potassium with 50 billion mt, accompanied by magnesium, sodium, lithium, boron, iodine, etc. It is the main producing area of potassium and magnesium salts.

Hard rock lithium ore

The hard rock lithium ore has outstanding comprehensive utilisation value because it is high in lithium grade and carries many rare metals such as co-associated beryllium, niobium, tantalum, cesium and rubidium.

Hard rock lithium ores in Australia mainly distribute in Western Australia and Queensland and the north. Australia is the world's largest major supplier of spodumene.

Overview of lithium resources in China:

Mika and Keeryin in Sichuan province, Hotan in Xinjiang province, Yichun Jiangxi province, Nanping in Fujian province have 5.89 million mt of Li2O resources, hard rock type, equivalent to 2.72 million mt in metal content, accounting for about 41.33% of the national lithium resources. Sichuan alone accounts for 79.37% of China's hard rock lithium resources.

Speech topic: Albemarle's sustainable development of lithium in China

Speaker: Xu Yang, President of Albemarle China Region

In the future, the company will promote its profitability by strategically increasing lithium and bromine capacity, adhering to capital constraint concept and maintaining excellent operation.

Albemarle will strive to maximize the productivity by optimizing the revenue, cash flow and cost structure of various businesses, deploying optimal operating models, and building a strong growth platform; and will actively manage the investment portfolio, create value for shareholders, maintain an "investment grade" credit rating, and support self-disciplined investment by way of dividends.

The company will achieve the sustainable development goals by continuous improvement of ESG performance across business units and accelerating the achievement of customers' sustainable development goals.

The combined carbon intensity of the company's catalysts and bromine businesses is expected to be reduced by 35% by 2030 to meet scientific carbon targets. By 2030, the company's freshwater use intensity in the regions with high and extremely high water risks will be reduced by 25%. By 2050, the company will achieve net zero carbon emissions.

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