Lithium supply to outweigh demand by 2018, cobalt to remain tight: CRU
And the story that triggered this stroll down Memory Lane? From the Financial Times, February 16:Dublin (Platts)--26 Apr 2017 952 am EDT/1352 GMTLithium supply was expected to outweigh demand as early as next year, UK-based consultancy CRU's Rebecca Gordon said Wednesday, while the cobalt market should remain tight well into the next decade on continued supply shortness.
While massive growth in battery demand was set to see consumption of both metals soar in coming years, new lithium supply was expected to match demand by 2018, reaching a peak of 25% of total supply by 2022, Gordon told a Minor Metals Trade Association meeting in Dublin.
"The 2016 lithium cost curve shows why prices had to rise so sharply," Gordon said, referring to lithium carbonate and hydroxide spot prices of over $10,000/mt in 2017, having doubled in less than 12 months on rising expectations of a demand boom from battery metals and tightness in supply.
"By 2020, the picture has changed, with brine expansions and new hard rock production keep prices in check and $6,500-7,000 the new cost level."
By that time, China's brine resources in Tibet and Qinghai were expected to come online, reducing unit costs, while spodumene resources in Sichuan and lepidolite resources in Jianxi were "committed and probable", Gordon said.
Even modest demand forecasts see annual lithium output growing to 500,000 mt by 2020 from around 200,000 mt currently....MUCH MORE
Sale of $5bn lithium stake to test electric car hype
PotashCorp plans to sell a big stake in Chile’s SQM, a key supplier of the metal...MUCH MORE
When Canadian fertiliser company Potash Corp acquired shares in Chile’s SQM almost 20 years ago, the latter’s lithium business appeared an afterthought. Controlled by Julio Ponce, the well-connected son-in-law of Chile’s former dictator, Augusto Pinochet, SQM was known as a fertiliser company.
However, the then obscure lithium business is why the 32 per cent stake is now valued at $4.7bn. Lithium has hitched a stunning ride on the wave of interest in electric cars, making it one of the world’s hottest commodities. SQM’s lithium business generates about 60 per cent of the profits for the company, which is in talks with Elon Musk’s Tesla over a deal to supply lithium, a key ingredient in electric car batteries. It is against this backdrop that Potash is being forced by regulators to sell the stake as a condition of its merger with rival Canadian fertiliser producer Agrium.
While only a handful of companies are likely to compete for the stake, the eventual price will be an important measure of how seriously the hype around electric cars is being taken. “It’s a good barometer of where lithium is today,” Simon Moores, founder of London-based consultancy Benchmark Mineral Intelligence, says. “Anyone investing $5bn has to invest for the long term, on a 10- to 20-year horizon, and so there’s no doubt you have to be extremely bullish on lithium.” ...
