Lithium and cobalt are the most shining 'stars' in the current non-ferrous metal sector: in the past two years, their prices have climbed more than three times. And this may just be just beginning, the reason is the demand for electric vehicles. The future will rise sharply.
Recently, McKinsey & Company's report "Lithium and Cobalt: The Story of Two Commodities" (hereinafter referred to as the 'Report') said that global electric vehicle production will increase from 3.2 million in 2017 to 13 million to 1800 in 2025. Taiwan, the growth rate is nearly 3-4 times; and by 2030 will reach a high point of 26 million to 36 million units, which is nearly 10 times the current output.
From mobile electronic devices, to the power battery of electric vehicles, to the energy storage of the grid, lithium is an indispensable rare metal; and one of the cores of lithium-ion batteries is its cathode material, lithium cobalt oxide. 2017 lithium price It reached a high of 19,500 US dollars / ton, an increase of 2.9 times over the previous year.
The global electric vehicle revolution relies mainly on the growth of China's electric vehicle market. The report predicts that by 2030, 50%-60% of the world's electric vehicles may be in China.
▲ Estimation of global electric vehicle growth by 2030
What factors influence the price of lithium and cobalt? How does the electric vehicle market affect the price of lithium and cobalt?
From the production of lithium to purification, China is the main force
According to the report, compared with 2017, the global demand for lithium salt due to the popularity of electric vehicles in 2025 may increase by up to 318%. By then, the demand for lithium salt in electric vehicle power batteries will account for the demand for lithium salt in the global market. 76%.
▲Lithium demand change estimate (lithium salt, thousand tons)
There are only 8 countries in the world that can produce lithium, and in 2017, Chile, Australia and China contributed 85% of lithium production.
At present, there are two ways to produce lithium. The salt lake brine extracts lithium and the ore extracts lithium. China is the only country in the world that can adopt two lithium production methods.
1. Salt Lake brine extraction:
Nearly 80% of the world's lithium salt resources are in the salt lakes, while the global salt lakes are basically distributed in Argentina, Bolivia, China and the United States. The cost of lithium extraction from salt lakes is low but difficult, and the crude lithium salt initially produced contains about 19 % lithium. The magnesium-lithium ratio in the salt lake indicates the difficulty of extracting lithium salt. For example, the magnesium-lithium ratio of the Chaerhan Salt Lake in China exceeds 1825:1, and the extraction difficulty is very large.
▲Global Lithium Salt Lake Distribution Map
Among them, Salalde Uyuni in Bolivia, Salarde Atacama in Chile and Zabuye Salt Lake in China are the three lithium salt lakes in the world with millions of tons of lithium. Argentina, Chile and Bolivia can achieve lithium salt in the salt lake brine.
2. Lithium ore extraction:
The remaining 20% of the lithium resources are in the ore. The ore capacity is released faster but the cost is higher. The initially extracted lithium hydroxide contains about 29% of lithium. The ore is also divided into lithium sulphate and lithium. Mica is two kinds of lithium.
China's Haofeng Lithium Industry and Tianqi Lithium Industry use imported xanthanite lithium, which is currently the mainstream production method, among which the world's largest high-purity spodumene producer Talison, currently It is controlled by China Tianqi Lithium Industry. In the lithium producing countries, Australia can achieve more mature ore to raise lithium.
According to the report, 80% of the spodumene produced in Australia was sent to China's Tianqi Lithium Industry and Yanfeng Lithium for further purification.
Beryllium and nickel mines will affect the price of cobalt
According to the report, compared with 2017, the global demand for refined cobalt will be doubled in 2025 due to the popularity of electric vehicles. By then, the global demand for refined cobalt from electric vehicle power batteries will exceed half of the total demand. Analysts have also said that in 2016 China's demand for cobalt from the battery sector (including 3C batteries) exceeded 80%.
▲ Estimation of changes in cobalt demand (refined cobalt, thousand tons)
More concentrated than lithium ore-rich salt lakes, is the distribution of cobalt mines. 75% of the world's cobalt mines are located in Congo (Gold) and Morocco. Fortunately, nearly 90% of the world's cobalt supply comes from by-products of copper and nickel. 55% of them come from copper mines and 35% from nickel mines.
According to the report, by 2025, more than 95% of cobalt comes from copper and nickel, and cobalt from copper mines will account for 75%. So in the future, the trend of copper and nickel will largely affect cobalt. the price of.
In 2017, China's cobalt purification accounted for 50%-60% of the world's total, about 52,300 tons; except China, the largest cobalt purification company in Finland, with an annual output of about 11,000 tons.
➤ Geo-factors affect the price of lithium cobalt
Since the production and purification of lithium and cobalt have a very obvious geographical relationship, the countries with resource endowments have greater pricing power. Therefore, the report believes that the macroeconomic policies and industrial economy of these countries will greatly affect the market of lithium and cobalt. price.
The report pointed out that lithium as a rare metal, its pricing mechanism lacks transparency. Sometimes the contract price of lithium can be more than 60% lower than the spot price in China, and the spot price of lithium is mainly used for speculation rather than bargaining in China.
As for the price of cobalt, the report pointed out that Congo (Gold) as the main producer of cobalt ore, its long-term political instability in the country will affect the stable supply of cobalt, which will further affect the uncertainty of cobalt prices in the market.
The report also pointed out that government policies, battery technology innovation and industrial economy will affect the development of the industry; any major changes may lead to very different prospects.
