The main raw materials for lithium batteries include lithium, nickel, manganese, cobalt and graphite. The price of these lithium metals has been soaring rapidly this year. From January to July in 2021, the price of lithium rose by 91.4%, and the prices of cobalt, copper, and aluminum rose by 63.1%, 30.3%, and 25.5%, respectively. Raw materials such as lithium and cobalt usually account for 30-45% of battery costs. According to the following transaction analysis, we can see that the price of lithium battery cathode materials continues to rise.
The surge in demand for electric vehicles has led to rising prices of raw materials. According to reports, total global sales of electric vehicles in June was 592,400, an increase of 144% over the same period last year. This year, the sales of electric vehicles are expected to reach 6.1 million, a year-on-year increase of 187%. Some experts pointed out that the rapidly growing demand for electric vehicles will lead to a shortage of battery supply. By 2025, the global supply of electric vehicle batteries may be insufficient again, and between 2026 and 2030, the shortage may further intensify.
The new crown pneumonia epidemic has triggered a global chip shortage. As many as 169 industries around the world have been affected by the chip shortage crisis to some extent, from steel products, concrete production to air-conditioning manufacturing, and even soap manufacturing. It also affects lithium batteries for electric vehicles by main cost composition-BMS system.
In view of the above factors, it is expected that the price of lithium batteries will remain high in the next two to three quarters. The following is Bloomberg’s judgment on the current situation of key materials for lithium batteries and the trend in the next few years.
- 1.The demand for batteries will grow strongly in this decade: It is estimated that by 2030, due to the increase in demand for electriccars, the annual demand for lithium batteries will exceed 2.7 TWh.
- 2. Before 2025, there will be sufficient supply of lithium, Carbonate and hydroxide should be able to get enough supply before at least 2025, but with the surge in demand for high nickel chemicals, by 2027, hydroxide may be faced with shortages. A key risk is that between now and 2025, approximately 35% of the expected increase in supply will come from integrated spodumene-lithium hydroxide manufacturers in Australia.
- 3.The price of lithium will rise further, but it will stabilize by 2022.In 2021, due to the impact of the epidemic, supply is limited, and the demand in China and Europe increases at the same time, causing the price of lithium to soar. The prices of lithium carbonate, lithium hydroxide and spodumene rose by 71%, 91% and 58%, respectively. All prices are expected to continue to rise, but as more supplies come online before 2022, prices will gradually stabilize.
- 4.Nickel prices will remain stable: At the beginning of this year, Bloomberg predicted that the nickel market will enter a two-tier nickel pricing system to further encourage additional investment in the supply ofgrade A nickel. Until the end of the first half of this year, the price dynamics of the nickel market has not seen such a rapid change. The recent price is expected to hover around 18,000 US dollars per ton.
- 5.The price of cobalt remains unchanged: The price of cobalt on the London Metal Exchange has risen by 42% so far this year. In March this year, the price rose to 53,000 US dollars per ton, which is the highest price since March 2018 and 15% higher than the average level of the past five years. The average price of cobalt is expected to reach US$45,000 per ton by the end of this year. As the market is expected to be relatively surplus in these 10 years, Bloomberg expects that cobalt prices will remain at an average level of US$44,000 per ton until 2025.
- 6.Strong recovery of manganese supply: As the new crown epidemic eased, manganese output in South Africa, the largest producer, increased by 208% year-on-year in April. But despite the resumption of mining operations in South Africa, the country’s mining operations still face challenges in transportation, power, and port operations.
- 7.Graphite demand growth: In 2021, the demand for graphite from lithium batteries will increase by 37% year-on-year, reaching nearly 447,000 tons; it is expected to increase by 297% by the end of 2030.
Based on the above data, what are your expectations for the price of lithium-ion batteries in 2022?