Cochilco: Global demand for lithium will exceed supply

    Driven by electric cars, global lithium demand will reach 1.79m tonnes a year by 2030, more than four times current demand of 429,000 tonnes, according to Cochilco, the Chilean copper commission, according to BNAmericas website.

    At the lithium Market Outlook symposium for the next 10 years, Cochilco forecast lithium consumption for electric vehicles to increase to 1.41 million tons per year from the current 75,000 tons per year.

    Meanwhile, demand for lithium in electronic equipment and energy storage will rise to 377,000 tonnes from the current 242,000 tonnes.

    Cinthya Roa, an analyst at Cochilco, said lithium carbonate is now the main source of lithium consumption, but by 2030 it will shift to hydroxide as demand for nickel-cobalt-manganese (NCM) batteries grows.

    Concerns about short range have led manufacturers to focus more on producing more energy-dense lithium-ion batteries.This has led to increased demand for NCM or nickel-cobalt-aluminium (NCA) batteries, which require lithium hydroxide rather than lithium carbonate, which is required for lithium iron phosphate (LFP).

    Based on this trend, Cochilco predicts that by 2030, lithium hydroxide will account for 57 per cent of total 1.7 mtpa lithium demand and lithium carbonate will account for 42 per cent.In 2019, lithium carbonate accounts for 71% of the annual demand of 323,000 tons; lithium hydroxide accounts for 24%; and other compounds or pure lithium metals account for 5%.

    Jake Fraser, a senior commodities analyst at Roskill, said at a web conference last week that the majority of demand will be met by existing production capacity over the next few years, but mine expansion and new projects will be needed after 2024.

    In terms of lithium production, Cochilco predicts that Australia and Chile will remain the world's leading producers, but the bulk of the new growth will come from the United States, Canada and Zimbabwe.By 2030, Australia's share of global lithium supply will fall from 48 per cent to 31 per cent, while Chile's will fall from 29 per cent to 17 per cent.

    Meanwhile, global lithium production will rise from 381,000 tons/year in 2019 to 1.46 million tons/year in 2030.

    There are currently two lithium producers in Chile, SQM and Albemarle.

    SQM hopes to increase lithium carbonate production capacity from the current 70,000 tons per year to 120,000 tons next year, and further to 160,000 tons in 2023.At the same time, SQM plans to increase the capacity of lithium hydroxide from 13,500 tons/year to 21,500 tons/year.

    Yabao currently has a lithium carbonate capacity of 44,000 tons per year, and the company plans to increase its capacity to 80,000 tons per year next year.

    Cochilco analysis thinks, the challenge for the next decade Chile lithium mining mainly includes the following aspects: the shortage of water resources, the existing lithium production facilities in the salt lake more strict to the requirement of ecological system protection, community relations, improve lithium brine recovery requirements, and increase r&d investment to rise for the industrial added value, etc.