Monday 10 October 2016

Electric rEVolution: Joe Lowry - New Lithium Supply And Demand Forecast.

Copyright Global Lithium LLC, used with permission.

  Joe Lowry provides us with his conservative outlook for Lithium Supply and Demand up to 2020. He is the must follow for all seriously interested in lithium market. Always do your very own DD, but at least you have the best data to work with. Now we have a news to put his view into perspective: Germany calls Europe to ban all ICE cars from 2030! It means that ramp up in the building production facilities for EVs and Lithium Batteries must be started now. Finally, we are talking seriously about The Switch to renewable Energy and Electric Cars by 2030! Lithium Technology is here and Lithium is a magic metal at the very heart of this Energy rEVolution.

Electric rEVolution: German Push To Ban Combustion-Engine Cars By 2030 Wins Support After DieselGate.

Mercedes EQ EV.

  "Now we can put the electric cars party taking over at  Paris Motor Show in the perspective. Germany would like to join Netherland and Norway banning sales of ICE cars from 2030. It means that now they will have to make electric cars and all that news about dozens electric cars coming in the next 10 years are getting more credibility. Lithium Battery makers are already moving into Europe: Mercedes, LG Chem, A123, BMZ and Volkswagen have all announced Lithium Megafactories in the making and security of lithium supply will be coming on the European investors' radar screens very soon. Read more."

Joe Lowry: The Top Five Lithium Market Myths.

Copyright Global Lithium LLC, used with permission.

  "Joe Lowry is sharing with us another insight into his "Opaque Lithium Kingdom" and I will share along with his previous post some links providing more info on the $4.5 Billion giant from China Ganfeng Lithium and its approach to secure the supply of lithium raw materials. Read more."

"Ganfeng exports and produces over 20 unique lithium products.In addition, it has developed an innovative patented technology that significantly shortens the standard production process. To support their expanding global operations, Ganfeng has taken steps to secure its future supply by investing heavily in a Canadian company called International Lithium Corp (TSX.V: ILC)." Peter Cole.

Joe Lowry:

As a general rule my supply and demand forecasts are conservative compared to others. I have learned over the years to temper the optimism of both producers and purchasers of lithium chemicals. An investment company that is trying to bring junior mining projects to the markets has a vested in interest in publishing "hockey stick" forecasts to help create interest in the lithium market as well as their favored stocks.
The above having been said, I also don't want to let my natural bias to "tone down" what I hear from from cathode producers and battery markers cause me to be overly cautious in making projections.
Over the past few months, I have spoken with the top cathode and battery makers around the world. Based on those discussions I have increased my 2020 demand forecast by approximately 30K MT - all in the lithium ion battery area. The increase represents only a portion of what I was told; however I was convinced that my prior 2020 number (which was very similar to ALB's) is too low. I am still well below the 2020 projections of others like Deutsche Bank and Canaccord. My 2020 demand number is still almost 50K MT below DB.
I have also upped my supply numbers. The increases are mostly on the hard rock side. Although I am hopeful about the prospects of brine in Argentina, for the most part those projects will impact the market after 2020.
Don't be fooled by the fact that the supply line stays marginally above demand. All lithium is not created equal. Some of the growth in supply comes from low quality brine in China and Orocobre still is struggling to produce projected volumes and quality. Given the long supply chains in the industry and depleted inventories in a shortage environment; the lithium market will remain tight into the next decade. Double digit lithium carbonate prices are becoming the new normal as contracts expire. The premium for hydroxide over carbonate will continue to grow.
There is a lot of detail behind the numbers but that will remain something I am not sharing on this forum.

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