China is pivotal to the EV revolution, given its place in
the lithium supply chain, delegates heard at the Chengdu
conference.
The Asian country is experiencing rapid development in the
new energy industry thanks to the support of the 13th Five-Year
Plan, which includes continued policy support in the form of
central and local government subsidies. China plans to
cumulatively manufacture and sell 2 million new energy vehicles
by 2020, a target revised early this year from 5 million new
energy vehicles set in 2015.
Despite a revision for the 2015 target, producing 2 million
units by 2020 is still a great leap from the estimated
production of 700,000 units in 2017, a conference delegate told
Metal Bulletin. "Imagine if China cannot reach the target
of 2 million units by 2020 but produced only 1.5 million units
- the growth rate is still magnificent and would sustain the
demand for Li-ion batteries and consumption for
lithium."
But lithium consumers and producers at the conference said
they are confident that EV production and sales growth rates
will remain strong in the following years close to rates
reported by the China Association of Automobile Manufacturers
of 30% and 26% year on year respectively in 2017.
To address the under-supply situation, lithium producers in
China aim to add over the course of 2018 up to 97,500 tonnes of
new lithium carbonate (Li2CO3) production capacity and 71,000
tonnes of new lithium hydroxide (Li2OH) production capacity,
Zhang Jiangfeng, director of the lithium branch of the China
Nonferrous Industry Association, said at the conference (see
table).
|
Jiangxi
Jiujiang Ronghui Lithium
|
8,000
tonnes of battery grade
Li2OH
8,000
tonnes of battery grade Li2CO3
|
Finish
construction in Q1 2018, and begin to
produce in Q2 2018
|
|
Jiangxi Yun
Lithium Materials
|
15,000
tonnes of Li2CO3
|
Finish
construction in Q1 2018, and begin to
produce in Q2
|
|
Tianqi
Lithium
|
24,000
tonnes of Li2OH
|
End of
2018
|
|
Hebei
Tianyuan Lithium Materials Co.,Ltd
|
12,000
tonnes of Li2CO3
4,000
tonnes of Li2OH
|
Early
2018
|
|
Jiangxi
Special Motor
|
20,000
tonnes of Li2CO3
5,000
tonnes of Li2OH
|
Begin
production in first half of 2018
|
|
Sichuan
Dingsheng Lithium
|
5,000
tonnes of battery grade
Li2CO3
5,000
tonnes of battery grade Li2OH
|
Early
2018
|
|
Sichuan
Zhiyuan Lithium
|
10,000
tonnes of battery grade Li2CO3
5,000
tonnes of Li2OH
|
Finish
construction in Q1 2018
|
|
Jiangxi
Ganfeng Lithium
|
20,000
tonnes of Li2OH
17,500
tonnes of Li2CO3
|
Finish
construction in Q1 and Q3 2018
respectively
|
|
|
Source: Zhang Jiangfeng, director at
China Nonferrous Industry Association's lithium
branch |
Tight supply of lithium carbonate (Li2CO3) in the global
market over recent months has been the main cause of high lithium
carbonate (Li2CO3) and lithium hydroxide (Li2OH)
prices.
Battery-grade lithium carbonate min 99.5% (Li2CO3), spot
prices, ex-works domestic China, have remained at strong
price levels over the course of the year. They were assessed
at 170,000-180,000 yuan ($25,687-27,198) per tonne* on
Thursday December 7.
Similarly, battery-grade lithium hydroxide min 56.5%
(Li2OH), spot prices, ex-works domestic China, were
unchanged at 142,000-150,000 yuan* per tonne on last
Thursday.
Will capacity ramp-ups meet
expectations?
Producing lithium is a complex process, leading to delays
reaching nameplate targets on time at some lithium
projects.
For this reason, some lithium consumers and producers at
the conference expressed doubts that this new production
capacity will be able to come online within 2018 since it may
take longer than expected to get production approval from the
environmental protection bureau in China. Other causes of
potential delays are difficulties in securing feedstock,
such as lithium spodumene (Li2O), from overseas.
"Adding 97,500 tonnes of new lithium carbonate (Li2CO3)
production capacity and 71,000 tonnes of new lithium
hydroxide (Li2OH) production capacity in China during 2018
sounds quite difficult and unrealistic given the difficulties
of ramping up production within the lithium industry…
these producers would have to secure feedstock, such as
lithium spodumene (Li2O), from Australia and the rest of the
world and that could be problematic," a lithium producer told
Industrial Minerals.
"We are talking about adding 168,500 tpy of lithium
carbonate [97,500 tpy] and hydroxide [71,000 tpy] over the
course of 2018 just in China.. world total production of
lithium products is today just above 200,000 tpy, so it would
be quite hard to add almost the same volume of material
within a year," a lithium consumer said.
"We believe it is quite an ambitious target given the
situation of the lithium industry because of all the issues
around ramping up lithium production, especially due to the
problems in securing raw material... We would be surprised if
these targets are met, but definitely displays the mood of
the lithium industry," the lithium consumer added.
Whether or not these targets will be achieved, these
Chinese companies' targets are a sign of the strong sentiment
of the Chinese lithium industry and the need for more
material.
*All lithium carbonate and hydroxide prices are
available in Industrial
Minerals’ Battery Price Report