The lithium industry needs to invest more than 40,000 million to meet the demand for batteries

The lithium industry needs an investment of $42 billion (40,400 million euros) to meet the demand for this raw material for electric car batteries between now and 2030. This is confirmed by the conclusions of the Benchmark Mineral Intelligence analysis, which calculates that it is equivalent to approximately 7,000 billion dollars a year (6,730 million euros) from now until 2028, with the goal of covering the needs of the industry by the end of the decade.

The growing trend in the supply and demand of electric vehicles is activating war for raw materials necessary to manufacture them. There are three metals that will cause a commercial fight of which the first outbreaks are already seen. The lithium, nickel and cobalt they will be the new “black gold” of the industry, which has already caused their prices to skyrocket to their all-time highs with an eye on the coming years and on a foreseeable shortage of supply.

Electric vehicle batteries can use lithium carbonate or lithium hydroxide. Their quantities are expressed in equivalent lithium carbonate (LCE) that contains both. The shortfall in supply has driven lithium carbonate prices to record levels that are above $50,000 a ton in Chinaaccording to BMI, and which forecasts that the demand for lithium in 2030 will reach 2.4 million tons of LCE, almost 1.8 million tons more than what it forecasts will be needed this year, some 600,000 tons, and compared to 490,000 last year.

Even though in China has the fourth largest lithium reserves in the worldMetal for electric vehicle batteries is found in salt lakes around Tibet and Qinghai, a sparsely populated Chinese province that straddles the Tibetan Plateau at high altitudes. This condition makes it difficult to refine and transport, and partly explains why Chinese companies this year have been looking for other deposits.

In relation to other regions of the world, the domestic lithium market of China has perked up in recent months, with more frequent transactions and higher trading volumes in the spot market, which has caused a higher price volatility in shorter periods of time.

investment lithium batteries electric cars 2030-interior
Lithium price benchmark as of April 22, 2022. Source: Benchmark Mineral Intelligence

As a result, and in order to monitor these changes more closely, Benchmark will publish data on the Chinese lithium market. once a week, instead of doing it every two weeks as before. In this report you will include the following prices:

  • Lithium Carbonate, EXW China (without transport and documents), ≥99.5% LitwoEITHER3 (battery grade).
  • Lithium Carbonate, EXW China, ≥99.0% LitwoEITHER3 (technical grade).
  • Lithium hydroxide, EXW China, ≥56.5% LiOH.

By 2030, there will be a deficit of 230,000 tons of refined nickel, as assessed by Benchmark’s Nickel Forecast. “Automakers are finally waking up to their huge disconnect from the commodity market,” says Cameron Hughes, an analyst at BMI.

In 2021, one-third of the world’s refined nickel supply came from Indonesia and is projected to reach 50% by 2025. However, the carbon footprint of Indonesian nickel may be much larger than that of other routes in the supply chain depending on Life Cycle Assessment (LCA) by Bruna Grossl of Benchmark.

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