Demand for lithium will grow at an average annual rate of 30% in 2021-2023, according to Bacanora – Product Commentary

By Jaime Llinares Taboada


Bacanora Lithium PLC said Thursday that demand for lithium is expected to increase at a compound annual growth rate of 30% through 2023 from 2020 levels. Here’s what the owner of the Sonora lithium project in Mexico had to say during its intermediate results:


On lithium prices:


“Despite the unprecedented global disruption precipitated by the COVID-19 pandemic, 2020 and the first half of 2021 saw a recovery in market sentiment for lithium with an associated rebound in demand and prices. “


“In 2020, lithium prices were beset by a slowdown in demand caused by the COVID-19-related demand slowdown caused by lockdowns that restricted manufacturing output and the related reduction in consumer confidence. “


“By the end of the year, prices had started to recover, with prices reported in December 2020 for median spot prices for lithium carbonate battery grade 99.5% CIF China, Japan and Korea at 6,750 US $ and min 56.5% of the midpoint spot grade lithium hydroxide battery. CIF China, Japan and Korea price at US $ 9,000 per tonne respectively. “


“During the first half of 2021, the prices of lithium products continued their upward trajectory. In June 2021, prices remained high, with lithium carbonate and lithium hydroxide rising to US $ 13,500 and US $ 15,000 per tonne, respectively. “


On lithium request:


“This dynamism in the price of lithium follows the tightening of the market as the electric vehicle (‘EV’) revolution accelerates, demand has eroded the excess supply seen in 2019 and 2020.”


This tension in the market is expected to continue, with Credit Suisse saying demand for lithium could triple by 2025 from 2020 levels and that supply would be stretched to meet that demand, but higher prices were necessary to induce the response of the required offer. “


“Global demand for lithium is expected to grow from 305,000 tonnes of lithium carbonate equivalent (‘LCE’) in 2020 to 452,000 tonnes in 2021 (48% year-over-year increase).”


However, global sales of electric vehicles are expected to exceed 4.6 million in 2021 compared to 3.2 million units in 2020, which would represent an increase of 44% for the year, which is comparable to the increase in 43% from 2019 to 2020. “


“The consequence of this dramatic shift in consumer behavior is that by 2023, lithium demand is expected to increase at a 30% CAGR to 675,000 tonnes of LCE from 2020 levels.”


“By 2030, global demand for batteries is expected to increase 14-fold by 2030, with Statista estimating lithium demand at 1.8 million tonnes by 2030.”


Write to Jaime Llinares Taboada at [email protected]; @JaimeLlinaresT


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