Lithium Market Update and Forecast


"Favorable price environment for lithium producers from 2014 onward."

Resource Capital Research recently released a market update and outlook for Q310. The report reveals lithium carbonate is currently trading in the range of $5,500–$6,000/ton, which is an improvement from the US$5,300/ton average of 2009. The compound annual growth rate (CAGR) of lithium carbonate for the previous four years ending in 2009 was approximately 6.2%.

The report anticipates that by 2015, nominal prices are expected to approach those seen before the global financial crisis in the range of $6,757/ton. The report assumes that with the modest assumption of 5% EV market penetration by 2020, lithium carbonate capacity from 2014 onward should create a favorable price environment for lithium producers.

Earlier this year, Pike Research released a report forecasting that the lithium-ion transportation battery industry could grow more than eight-fold in the next five years—reaching nearly $8 billion in global sales by 2015, up from $878M in 2010. The forecasts suggested combined EV sales in the Asia Pacific region could total almost 1.1M in 2015—more than the U.S. and Western Europe combined. The Asian lithium ion battery market could surpass $4 billion, representing 53% of total global sales.

Both the current U.S. administration and Chinese government have demonstrated interest in, and considerable investment commitment toward, the EV market over the next 10 years. The DOE has launched an Electric Drive Vehicle (EDV) Battery and Component Manufacturing Initiative of the American Recovery and Reinvestment Act of 2009 (ARRA), which has been made available to provide approximately $2 billion in federal stimulus in part to promote the development of U.S.-based advanced battery production for the EDV market. China also has recently announced a budget of more than $15 billion for EVs to include a draft plan for 2011–2020 that the Ministry of Industry and Information Technology may submit this month to the State Council for approval.

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