NEW YORK (Commodity Online): Lithium demand has got a boost thanks to regulations that prevent the use of lead on environmental grounds and the rising demand from the electric/hybrid vehicles. According to some estimates lithium demand will double from the present 110,000 metric tonnes per annum thanks to increased consumption of digital products that require storage such as cell phones and laptops.
Meanwhile, some media reports have cited adverse weather conditions in Chile, the major producer of the commodity to impact supplies and push up prices.Bike Europe reproted that rising prices of lithium-ion batteries are causing problems for electric bike makers in China.
Since May 2011, the Chinese government has started to forbid the production of lead-acid batteries nationwide, causing a supply shortage of lead-acid batteries and subsequent price increase. The big majority of the millions of e-bikes sold every year in China are equipped with lead-acid batteries. The turn to Li-Ion batteries will drive up demand and with that also prices, Bike Europe said.
Dave Brown wrote in Lithium Investing News that Chile's lithium brine production facilities are not insulated against natural catastrophes of an unpredictable nature such as earthquakes and storms.
"As the source of more than 50 percent of the world’s lithium production, any regional problems in Chile might be intensified to involve downstream implications for all consumers of lithium applications," Dave Brown said.
According to Daniela Desormeaux, Director signumBox in a presentation made in March this year, 24% of lithium consumption comes from batteries, 29% from enamels, glass and ceramics; 20% lubrcating greases, 5% air-conditioners among others. The electric and hybrid vehicles would continue to gain market favour in view of reduction in carbon emissions and lithium-ion batteries are the first choice for the industry, he said. Lithium demand has grown at a compound annual growth rate of 6.5% in the past 20 years.
Rising deamand, falling supplies augurs well for lithium producers? Reuters in a recent report said that the profitability of new lithium producers (junior miners) would depend on thier ability to hold costs. Lithium projects generally fall into two types: brine or hard rock. Brine producers, which pump salt water containing lithium from the ground into an evaporation pond, have the advantage of lower costs and a higher quality raw product.
The most economically viable brine projects are in Argentina and Chile, with the largest lithium deposit in the world, the Salar de Uyuni, remaining undeveloped in Bolivia, Reuters report added.
With rising demand from electric cars industry, the exploration for the commodity is rising across the globe with 80 exploration projects chiefly in Canada, Argentian and USA. Of these 4% are based on minerals and 52% salar brine, which is the cheaper way of mining the commodity.
Lithium is abundant and is spread across the world, there is no cause for worry, according to Daniela DEsormeaux.
