The annual lithium demand of Livent:2025 is nearly five times higher than that of 2017, and the macro risk makes the cobalt lithium market uneasy.

SMM10, 12 Feb: Livent CEO Paul Graves said producers are working to increase production to meet demand for minerals critical to making batteries for electric vehicles, Bloomberg reported. Lithium demand is expected to increase nearly fivefold from 2017 by 2025, and the biggest challenge now is how to meet demand, which is at great risk of being in short supply in the near future. This expectation is also the main reason for the tripling of cobalt prices in the previous three years.

As lithium prices plummet this year, investor interest in lithium began to waver amid speculation that producers could significantly increase supply. Some companies are trying to raise money for expansion, while others face regulatory hurdles that could hinder production gains, Graves said.

Livent expects demand for lithium carbonate to be 1 million tons by 2025, which will be 250000 tons less than consumption. Bloomberg NEF forecast demand for lithium carbonate at 850000 tons by 2025 in an August report.

Logan Goldie-Scot and James Frith, analysts at Bloomberg NEF, said supply would exceed demand in 2018 as two new mines went into production and another expanded production. But according to the current report, supply will tighten again in the long run, although mining companies are considering further expansion of capacity.

Livent sold 20 million shares at $17 a share and raised $390 million in its initial public offering, below the $18-$20 price range expected in the company's Oct. 1 filing. Graves said initial public offerings are extremely difficult under current market conditions.

Chris Berry, an energy and metals analyst based in New York and founder of research firm House Mountain Partners LLC, said on Wednesday, "I think investors have decided to suspend investment in lithium and cobalt, and macroeconomic issues are now dominant.

The price of lithium carbonate at the Argentine Salar del Hombre Muerto mine in South America, which operates in FMC, fell to $14500 a tonne in September from an all-time high of $15750 a tonne in June, according to Benchmark Mineral Intelligence.

"I have no doubt on the demand side," Berry said. "I have no doubt that there will be a lot of money to deploy there, but the market is uneasy about China's late economic growth, tariffs and rising interest rates in the United States.

Graves, 47, has worked at Goldman Sachs for 12 years, including as co-head of natural resources in Asia and chief financial officer at FMC before joining Livent.

(SMM translated from Bloomberg News)