Electric cars and smartphones to drive lithium demand
Subject Outlook for the lithium market. Significance Moves by the lithium 'majors' to consolidate control over the supply chain by taking positions in start-up projects have boosted the share prices of major lithium producers this year. The market for lithium is expected to rise from just under 200,000 tonnes of lithium carbonate equivalent (LCE) in 2015 to 310,000-320,000 in 2020 and 400,000 by 2025. Electric cars are expected to be the strongest source of new lithium demand and lithium-ion batteries are also crucial to consumer electronics, particularly smartphones and tablets. Impacts Hard rock mining has a shorter lead time than brine evaporation output, so hard rock output is likely to dominate in the short term. Brine evaporation output is cheaper to produce and is likely to undercut hard rock projects in the longer term. The share performance of lithium producers is likely to stabilise as projects get development sanction and supply keeps pace with demand. Lithium demand is certain to grow, but the rate of electric car adoption is a critical factor in fulfilling bullish demand forecasts. Plug-in hybrid electric cars are forecast to enjoy higher sales than battery electric cars but they need less lithium.