About S&P Global Commodity Insights

Powering the Markets

S&P Global Platts and IHS Markit ENR combine to become S&P Global Commodity Insights. S&P Global Commodity Insights brings together highly complementary capabilities to power the markets of the future.

Assessments & Benchmarks

We engage with market participants and evolve rigorous methodologies for assessments that reflect a commodity’s true value. Along with news and market commentary, our assessments help you make successful trading decisions.

Workflow Solutions

We partner with you to enhance workflows, increase efficiency and optimize business processes by leveraging AI-driven software and applications, integrated platforms and machine delivery.

Research & Insights

We develop deep, interconnected industry analysis and forecasts across the full energy and commodities value chain. Subscriptions to our market insights and analysis include access to subject matter experts.

Conferences & Advisory Solutions

We provide consulting services on current challenges such as renewables and energy transition, and host education sessions, webinars, and premier events like CERAWeek and Global Power Markets. 

Together we are helping companies like yours with highly relevant information, expert analysis, and workflow solutions you need to maintain your competitive edge.

Infographic: Insufficient lithium supply could decelerate energy transition

Lithium is a key raw material for electric vehicles and energy storage systems, but the lack of investment in new supply in previous years might generate a structural deficit throughout this decade, data from the expected supply versus expected demand (both until 2030) demonstrates.

During the last lithium price bear run, from mid-2018 to mid-2020, investments shriveled from the specialty chemical. In early 2018, a lot of new spodumene ore capacity started running from previous investments in anticipation to an expected EV boom that didn't start until the second half of 2020; the oversupply crashed prices and halted investments.

This time, the situation is completely different because demand is solid and growing much faster than supply. EV sales accounted for almost 20% of new car sales in China and over 25% in the European Union in recent months, forcing suppliers to try accelerating expansion and new projects. Financing and permitting, however, are considered significant hurdles.

Click here to see the full-sized infographic

Infographic: The lithium deficit road map. Will future supply meet lithium demand?

This has translated into surging lithium prices. Since early 2021, Platts lithium carbonate CIF North Asia rose 548% to $41,200/mt on Jan. 21, 2022. Lithium hydroxide CIF North Asia moved up 318% to $37,700/mt and the spodumene concentrate used for conversion in lithium chemicals surged 588% to $3,100/mt FOB Australia basis.

Although the battery industry has been investing significantly in downstream battery capacity to power the surging EV demand, lithium is still getting less funding than required — and such investment could be too late to prevent a structural deficit in the coming years.

"Unfortunately, battery capacity can be built much faster than lithium projects," said Joe Lowry, president of consulting firm Global Lithium. "The lack of investment in lithium capacity over the past five years will extend the supply shortage."

The situation is so critical that Lowry didn't want to make demand forecasts beyond 2027 —the supply-demand imbalance could be so serious that supply might end up capping demand, so forecasting beyond that could be misleading, he said.

"Even well-capitalized major lithium companies have struggled to meet their expansion targets," Lowry said. "New producers have seen their project timelines extended in many cases due to Covid and related supply chain issues along with their ‘learning curves' OEMs and battery producers that assumed ‘market forces' would ensure adequate battery raw materials are finally taking note of the supply-demand issue but much too late to solve the problem in the near to mid-term."

The outlook described by Lowry is confirmed by Platts' comparison between the expected supply and the expected demand until 2030 (see infographic below), which shows that supply should not reach the projected 2 million mt demand by the end of the decade. To run the analysis, Platts divided the projects in three levels depending on when they should reach the nameplate capacity.

To see the full list of projects considered in the infographic, as well as the criteria for the categorization, click here.

Carbonate vs hydroxide

Despite the increasing interest for lithium hydroxide, which is required in nickel-rich battery chemistries that have higher energy density (allowing EVs to drive longer at a single charge), most of the existing integrated capacity is dedicated to lithium carbonate.

Although more greenfield projects — including some brines, that necessarily need to produce carbonate in the first place — are expected to include hydroxide conversion, and most of the hard rock supply is targeted for hydroxide, carbonate will still represent a significant portion of supply and hydroxide production will depend on the adequate supply of raw materials for conversion.

The lack of feedstock (usually spodumene) should be a concern for several projects of non-integrated conversion capacity, of which most are eyeing to supply hydroxide. Adding conversion capacity is less capital-intensive and faster than building the underlying feedstock capacity, meaning there could be a mismatch that could leave some hydroxide converters with idled capacity, despite the surging demand, sources said.

Some projects will also have the option to producer either carbonate or hydroxide depending on the market conditions. The surge in demand for nickel-free lithium-iron-phosphate battery chemistries, including official announcements from the likes of Tesla and Volkswagen, means demand for lithium carbonate should stay healthy throughout the decade.

The second generation of lithium projects should also bring new kinds of assets that were never developed before, such as clay and geothermal brines, as well as the potential employment of the direct lithium extraction (DLE) technology. Most of these will also target to increase the integrated hydroxide capacity, but they will still need to prove their commercial viability.

DLE has been touted by some as the holy grail for the lithium industry, yielding higher quality products at a faster production schedule, with lower costs and lower water consumption. Others, however, stress that DLE is not an off-the-shelf solution that can be applied the same way in all projects, as well as the fact that it has never been tested on a commercial scale, meaning its success is still yet to be proven.

Connect Now

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Other Articles

Skyrocketing Battery Metal Prices Could Pump Brakes on Surging EV Auto Sales

S&P Global Platts lithium prices up more than 200%, nickel costs rise nearly 35%, and cobalt climbed nearly 90% since August 2020.

Global light duty EV sales to rise to 26.8 mil by 2030: Platts Analytics

Global light duty electric vehicle sales reached a record high of 6.3 million units in 2021, up 102% year on year, with this number expected to rise to 26.8 million units in 2030, according to the latest analysis from S&P Global Platts Analytics.

Insight Conversation: Benedikt Sobotka, Eurasian Resources Group

Eurasian Resources Group CEO Benedikt Sobotka, at the helm of a diversified mining group which has successfully entered the cobalt recycling space, talks to Diana Kinch, S&P Global Platts senior editor, EMEA Metals News, about the crucial role recycling will play in market dynamics as demand for metals grows in the energy transition.

Steel versus plastics: The race to sustainability

S&P Global Platts looks at the supply, demand, and price drivers of today’s growing recycled plastics market, as well as the opportunities and challenges of the plastics sector in a circular economy.

The rocky path to regional battery supply chains

Europe and the US are beefing up their battery metals supply chains, but are unlikely to overtake China anytime soon. Henrique Ribeiro and Jacqueline Holman look at the prospects for gigafactories across the world.

Manufacturers’ group asks CFTC to probe Jan. 27 Henry Hub futures price spike

An industrial trade group has urged the US Commodity Futures Trading Commission to investigate the expiring natural gas futures contracts for Jan. 27, pointing to a 46% one-day price increase and warning of costs to consumers and manufacturers.

Atlas of Energy Transition™

Navigating a pathway to a low-carbon global economy requires a new plan. The S&P Global Platts Atlas of Energy Transition™, produced in collaboration with S&P Global Market Intelligence, is your map to the sustainable commodity markets of the future.

Weak Links in the Supply Chain

From challenges to global trade, concerns in the energy sector, and upheaval in retail industry, corporations and investors are navigating the pandemic’s disruptions to global supply chains.

China’s steel industry eyes major HRC capacity expansion in 2022-2023

China's hot-rolled coil capacity expansion is set to gain pace in 2022-2023 as the country marks a slow but gradual transition from property-driven to manufacturing-driven economic growth, a development that is expected to diminish demand for long steel from the property and infrastructure sectors in the long term.

Feeling the Heat: 5 Key Features of the Iron Ore Markets in 2021

After a rollercoaster year in the iron ore sector, Niki Wang takes stock of some of the biggest themes that emerged in 2021, from price volatility to an increased focus on specifications.

Airbus, CFM to develop hydrogen combustion engine for aviation

Airbus and jet engine manufacturer CFM International are to partner on a hydrogen combustion demonstration project that will launch around 2025, the companies said in a statement Feb. 22.

Breaking barriers to accelerate energy transition

Our new special report looks at how energy and commodity markets are responding to the decarbonization challenge, from oil to marine fuels to battery metals and petrochemicals.

China’s Dec manufacturing PMI rises, uptrend likely to continue in early 2022

The Chinese manufacturing purchasing managers index continued to rise in December at 50.3 points, with several steel market sources expecting China's manufacturing activity to continue improving in the first half of 2022.

ESG Spurs Mining Evolution

ESG factors are increasingly influencing decisions from board rooms to mining sites. Paul Bartholomew explores the impact on development of ferrous projects around the world.

Low-Carbon Metals: A Market for Premium Emerges

As demand for low-carbon aluminum and steel rises globally, a tiered market is emerging with premiums for products with reduced emissions. By Hector Forster, Diana Kinch, and William Healy.

Listen: Battery pack costs on the rise: will it slow down EV adoption?

For the first time in over a decade, battery pack costs started to increase —even in the low cost segment. Battery packs are the main cost component in an electric vehicle (EV), meaning that this uptrend should either squeeze manufacturers' margins or lead to higher EV price tags.

Beijing Olympics adds extra factor to Q1 steel market

The first quarter of each year is often atypical of the year as a whole in China’s steel market due to the influence of the long Lunar New Year holidays. This year will be even more of an outlier because of the Beijing Winter Olympics which start at the same time as the holiday period in early February. The first quarter of each year is often atypical of the year as a whole in China’s steel market due to the influence of the long Lunar New Year holidays. This year will be even more of an outlier because of the Beijing Winter Olympics which start at the same time as the holiday period in early February.