Lithium Americas Corp (LAAC)

[overlordpeter]

Batteries still driving demand

As demand for batteries continues to grow around the world, so will demand for lithium, but according to Stormcrow Capital Ltd president Jon Hykawy, other applications will also drive consumption.

Speaking at PDAC, he outlined that rechargeable battery demand is pegged at 29% but other markets also remain important, such as the manufacture of ceramics, fritz, glazes, greases, thermal glass and metallurgical powder.

"All of these markets are growing – or shrinking in the case of aluminium – at various rates. But the battery side of this equation is growing at the largest rate," he said.

Hykawy estimated that total battery demand increased 11% between 2014 and 2015, with a dramatic rise expected for battery materials such as graphite, lithium and cobalt out to 2025.

Current demand for lithium remains in the region of 200,000 tpa with global nameplate capacity estimated at around 231,000 tonnes.

"Why then is the price going crazy? There are some issues with the supply in China which is why some Chinese companies were recently trying to find buyers at prices as high as $30,000/tonne but that is exclusive to China. We do however see prices going higher even in the West," Hykawy outlined, pointing to recent price increases by US-based FMC Corp.

Out to 2025, Hykawy expects demand in excess of 400,000 tpa and supply of around 425,000 tpa, with new projects coming online.

Hykawy cautioned that the 25,000 tonne overlap is not a large margin of error, however. "Some of these [new lithium] projects aren’t completely financed and there should be some concern about supply but not all lithium goes into batteries. Some of it is lower value and used for things like greases and there is some elasticity in market segments," he said.