Massive Lithium oversupply by 2020https://www.theenergyreport.com/pub/na/8371
Massive Lithium Oversupply by 2020
Source: Mineweb, Dorothy Kosich (1/19/11)
"The 2020 lithium supply/demand forecast is 'shocking.'"
Lithium research consultants, TRU Group, says the 2020 lithiumsupply/demand forecast is "shocking" as "seemingly unstoppable supplygrowth will cause such huge overcapacity that the stability of theindustry will be threatened."
TRU says it has evaluated andmodeled most of the known existing lithium properties and advisednumerous players on myriad lithium business, investment and exploitationissues.
In presentations scheduled to be made during the IMToronto 3rd Lithium Supply & Markets Conference this week, TRUGroup's updated lithium model reveals the possibility of "massivelithium oversupply through 2020."
TRU CEO Edward Andersonestimates lithium demand will be 40,000 tpy in the next decade whilepipeline projects and expansions could increase capacity by anadditional 40,000 tpy—"double what the industry needs."
VeteranLithium Geologist Ihor Kunasz says existing lithium players "have threetimes the lithium concentration and also reserves that dwarf any of thenew players."
Lower prices and fierce competition through 2020 isbad news for new lithium project promoters, "who will find itimpossible to compete against the distinctive natural cost advantage ofbrine-based lithium producers."
TRU advises existing lithiumchemical producers have the in-ground reserves and ability to meetnearly all market requirements in the next decade, simply by expandingcapacity.
Anderson believes that lithium projects already in thepipeline will increase the mineral's supply/demand gap from 2013–2015.New development projects may exacerbate the oversupply from 2015–2020.From 2017–2018, he forecasts a "serious peak oversupply" will negativelyimpact current lithium producers.
He advised that emergingtechnologies, including selective iron adsorption, electrodialysis andnanofiltration "provide new options for medium-scale lithiumdevelopments."
"Lithium carbonate prices fell precipitately to$4500/t in 2010 and will remain depressed," Anderson forecast. "Longterm there is no market-driven upward-price pressure, so prices willremain stable and likely below $5,000/t."