Demand is growing as expected.Demand
Lithium chemical demandrose to an estimated 269,000 tonnes in calendar 2018, up 15% versus theprevious year, on the back of a 64% jump in global Electric Vehicle (EV) sales,which breached 2 million units for the first time. EV adoption is in itsinfancy with sales positioned at the early stage of the S-curve pattern forinnovation. The small number of EV models available, particularly in Europe andNorth America has to date limited consumer take-up. Here however, theautomotive industry is on the cusp of change, with at least twenty new electricmodels planned to roll-of production lines in calendar 2019 and a raft offurther new model offerings in 2020. Many battery materials commentatorsforecast that the demand outlook for lithium chemicals is exceptionally strongand that annual demand will breach one million tonnes of lithium carbonateequivalent (LCE) by 2025. The major auto manufacturers will fuel this demand;Ford plans to have 40 hybrid and EV models and Renault 12 EV models by 2022, GM20 EV models by 2023 and VW expects to have developed 80 EV models by 2025.Many other manufacturers have similar aspirations and Chinese autos areexpected to comply with a 20% EV penetration rate ruling by 2025. Such choicewill undoubtably lead to greater consumer adoption of the EV. New developmentsin mobile batteries should continue to rely on the unique properties of lithiumand its chemical salts. Solid state batteries are seen as the most likely nextgeneration technology, which should deliver superior charge density and employa lithium metal anode as well as a lithium chemical based cathode. Small, fastgrowing markets tend to exhibit amplified boom-bust cycles, evidenced by thesharp lithium chemical price correction experienced since early calendar 2018,which in large part was in anticipation that the market would transition intosurplus. However, many industry commentators and producers continue to predictthat lithium chemical demand will continue to have a compound annual growthrate of between 16% and 18% to 2030, with lithium-ion batteries accounting forthe majority of this growth. Such growth coupled with continued constraint innew supply shown by incumbent producers is predicted to transition the lithiummarket back into deficit in the early 2020’s