Lithium Industry Impacts from Japan


"High proportion of the lithium's production ecosystem is located in Japan."

The global supply chain for electronics will likely be affected by the series of catastrophes continuing to unfold in Japan, the world's third largest economy.

A key demand driver for the global lithium industry is domiciled in Japan, where an extensive concentration of lithium-ion and related high energy-density battery technologies are manufactured. A relatively high proportion of the world's production ecosystem for these batteries is not only located in Japan, but many of the facilities are in areas affected by the quake or within the evacuation radius of the troubled nuclear power plant there.

In an exclusive interview with Lithium Investing News, Battery Materials and Technologies Analyst Jonathan Lee, with Byron Capital Markets, believes that the risk of a prolonged impact is not likely. "In the very short term, with manufacturing in Japan significantly slowed or halted due to the recent crisis, there will no doubt be a decreased demand for lithium as with many other materials. It's hard to determine when manufacturing demands for lithium will increase in Japan again, but the increase will be significant because the demand for end use lithium-ion batteries is still present and re-stocking will be necessary."

Over the medium and longer term, he believes the impact should be negligible, "in the medium and long terms, say 3 years and beyond, I don't see this affecting the industry at all. The amount of lithium demanded by manufacturers in Japan will depend, in part, on battery demand from consumers, which we believe is strong in the future."

Mr. Lee was somewhat cautious on the underlying lithium demands, "for existing producers, we expect to see a decrease in demand for lithium in the short term, but the end-user demand for products with lithium continues to grow and thus, the demand should increase after that."

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