The global output of lithium and cobalt in mines will be released in 2021. Prices may continue to rise in 2022

A few days ago, (USGS) of the US Geological Survey released preliminary statistics on global lithium and cobalt production in mines in 2021, according to the Mining.com website.

Data show that in terms of lithium production, global mine lithium production in 2021 was 100000 tons (excluding the United States), an increase of 21 percent from 82500 tons last year.

USGS believes that the increase in production is mainly due to the strong market demand for lithium-ion batteries and the rise in lithium prices. Global lithium consumption in 2021 is estimated to be 93000 tons, up 33 per cent from 70, 000 tons in 2020.

"Lithium supply security has become the biggest concern for technology companies in Asia, Europe and the United States," USGS said in its latest report.

Australia has four lithium mines, Argentina and Chile have two lithium brines each, and China has two lithium brine mines and one hard rock lithium mine.

In addition, small mines in Brazil, China, Portugal, the United States and Zimbabwe are also the main sources of world lithium production.

In terms of cobalt production, according to USGS, global cobalt production reached an all-time high of 170000 tons in 2021, up 20 per cent from 142000 tons in 2020. Despite the commissioning of new mines and the resumption of production of suspended mines, this increase in raw materials is mainly due to an increase in the production of existing mines.

Of these, the Democratic Republic of the Congo remains the world's largest cobalt producer, accounting for more than 70 per cent of global cobalt production, followed by Russia (7600 tons) and Australia (5600 tons).

In the domestic market, China is the world's largest producer and consumer of refined cobalt, with 80% of the cobalt used in rechargeable batteries.

According to data previously released by the Lithium Branch of the China Nonferrous Metals Industry Association, China's lithium industry still maintained a rapid growth rate in 2021: lithium carbonate production of 298200 tons (with a production capacity of about 500000 tons), an increase of about 59.47%; lithium hydroxide production of 190300 tons (with a capacity of about 260000 tons), an increase of about 105% over the same period last year. In China, the lithium salt produced by using domestic salt lake brine (60, 000 tons), lepidolite concentrate (60, 000 tons) and spodumene (10, 000 tons) is equivalent to about 160000 tons of lithium carbonate, and the dependence of lithium raw materials is about 65%.

In terms of cathode materials, data from the Lithium Industry Branch show that China's output of cathode materials in 2021 is about 1.1117 million tons (with a production capacity of more than 1.7 million tons), with an increase of about 100.78% over the same period last year. Among them, the output of lithium cobalt, ternary materials, lithium iron phosphate and lithium manganate is 101000 tons, 440500 tons, 459100 tons and 111100 tons respectively.

According to SMM historical prices, by the end of 2021, the average spot prices of electrolytic nickel and cobalt were 154300 yuan / ton and 487000 yuan / ton respectively, up 19.24% and 75.8% over the same period last year; and the average spot prices of lithium carbonate and lithium hydroxide were 275000 yuan / ton and 222500 yuan / ton respectively, up 438% and 349% from the same period last year.

The output and price of lithium and cobalt will rise much faster than expected in 2021. Looking forward to 2022, the relevant agencies predict that the economy will continue to be high.

Citic Securities predicts that in 2022, as the impact of long order pricing of major enterprises in South America is eliminated and lithium concentrate prices continue to rise, global lithium prices are expected to resonate upward, lithium carbonate prices in South America will rise to US $25000 / ton in the first half of 2022, Australian lithium concentrate prices will rise to more than US $3000 / ton, and lithium product prices in the Chinese market will remain high. The rapid rise of lithium prices in 2021 has caused worries about resource supply and cost control in the lower reaches of the industrial chain. Integrated lithium producers with mining resources have both guaranteed supply and low-cost advantages, and the status of the industrial chain will continue to be strengthened in the future. the profits of the industrial chain will also be gradually concentrated to them, fully benefiting from the upward lithium price.

In terms of cobalt, the cobalt industry will enter its third year of tight supply in 2022, which will catalyze prices to rise. The cobalt price center is expected to operate at more than 450000 yuan per ton in 2022, up more than 20% from 2021. Cobalt sector companies are expected to exceed expectations in 2022, coupled with the fact that related companies currently have a significant undervaluation advantage to maintain the cobalt sector "stronger than the market" rating.