LSM 18: What we learned at the 10th Lithium Supply & Markets Conference
Published: Monday, 02 July 2018
Key takeaways from Industrial Minerals tenth Lithium Supply & Markets Conference, which took place in Las Vegas on June 26-28.
Battery makers and new energy vehicle (NEV)
manufacturers seek lower lithium prices, multi-year
The world’s largest consumers of lithium
compounds, such as battery makers and NEV manufacturers, want
lower and stable lithium prices. After the shortening of
contractual periods to a single year after the lithium demand
shock at the end of 2015, battery makers and NEV manufacturers
are now looking to sign supply contracts for five or more years
with multiple suppliers to ensure consistent delivery at lower
Lithium producers agree that shortage of lithium
battery-grade compounds is here to stay
The world’s largest lithium producers agree that
the shortage of lithium battery-grade compounds will endure
both in 2018 and in the years to come. Despite additional
lithium units from Australian hard rock and expansions in brine
production, supply has been overestimated and demand
underestimated over the past 10 years.
Most of the new production is struggling to meet the
battery-grade specifications for cathode and battery makers,
lithium producers said, making talk of a supply surplus a
misleading concept. Still, change may be coming: The likes of
Panasonic and other lithium converters are looking to assist
producers in their attempts to provide battery-grade quality
Lithium carbonate to remain important despite battery
manufacturers’ preference for lithium
Lithium hydroxide usage in the battery sector is growing due to
its application in next generation cathode-batteries such as
NMC 622, NMC 811 and NCA +. But lithium carbonate compounds
will remain very important both to battery and to non-battery
industries due to its usage in several batteries such as LFP,
LCO or NMC 111 while raw lithium hydroxide has non-battery
applications, lithium producers agreed.
DSO moving from Australia to China
How successful the conversion of Australian Direct shipping ore
(DSO) (min 1-1.5% Li2O) in China has been remains a burning
question for the lithium industry. Some lithium producers and
consumers maintain the conversion of DSO into battery-grade
lithium units in China has run into obstacles.
In any case, producers and consumers outside China see DSO
conversion as a short-term phenomenon due to the
unsustainability of shipping rock with low lithium content, the
technological challenge of converting it at efficient rates and
the large amounts of waste generated from this process.
Lithium a specialty chemical, not a
Most lithium producers in attendance qualified lithium
compounds as specialty chemicals rather than as commodities - a
marked difference from how investors perceive the
These specialty chemicals, especially the battery-grade
compounds, must undergo a long and arduous process before being
qualified for use by battery makers, the former argue.
Skepticism about lithium indexation but support for the
need for a new pricing mechanism:
Lithium producers at the conference remained skeptical about
lithium indexation - price negotiations remain a one-to-one
process in an industry that takes its guidance usually from
import/export data alongside internal sales figures by the
But junior producers and investors are supportive of a new
price mechanism to hedge their risk and to lock in investment
for their projects. Carmakers and battery producers also
support this idea due to the need for price transparency and
because of their desire to secure lower and stable prices for
longer contractual periods.
Learn more about Metal Bulletin's lithium price spotlight here.
All lithium carbonate, hydroxide and spodumene prices are
available in our Battery Raw Materials Market Tracker. Get a
sample of the report here.