Battery Raw Material Review, Outlook – SP Angel Commodity Research Book
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Electric Revolution driving lithium dreams and cobalt nightmares
- Anti-pollution legislation and responsible social trends are driving structural change in automotive and energy markets.
- Consumers and industry are driving growth in electric vehicles and in new energy efficient technologies.
- The Paris Agreement should help financing and technological innovation to enhance green infrastructural capacity to slow destructive environmental damage.
- Electric vehicles, LEDs and other new technologies are generating demand for novel raw materials driving exploration and development along the entire global supply chain. The coming decades will see a decline in the terminal value of energy and a broad upheaval in electromobility.
- The rapid advance of “black box” proprietary technologies and transformative new supply have the potential to disrupt traditional commodity markets.
- The attached report examines the fundamental metals crucial to the green revolution and presents the relevant supply / demand data for our analysis.
Key findings from the report;
- The IMF forecast global GDP growth 3.7% and 3.8% into 2017 and 2018 respectively on the back of rising global investment and positive sentiment toward industrial production, manufacturing and trade. Positive global trends highlight favourable economic conditions and a supportive environment for commodities.
- The Paris Agreement and subsequent ‘One Planet Summit’ are creating supportive legal and financial declarations to drive energy capacity from renewable and nuclear sources above 50% global total by 2040.
- [email protected] campaigns redefine ambitious goal of 30% market share for electric vehicles, significantly boosting demand for energy capture, storage and delivery infrastructure and associated raw materials.
- Innovate and competing technologies are creating rapid demand for battery chemistries to generate maximum energy density.
- Commercialisation of closed-loop multi-metal recycling of batteries represents a fundamental new industry with significant revenue potential.
- Copper: Long-term supply concerns are driving tightening market conditions for copper as continued demand from power and construction are boosted by electro mobility.
- Nickel: Despite strong innovative demand from battery-technologies, market hype is exaggerated with current consumption at only 3% and dominated by stainless steel. However, sustained investment in sulphide exploration and processing is required to maintain strong production. Technological trends toward higher nickel ratio nickel-manganese-cobalt (NMC) batteries will only exacerbate consumption.
- Lithium: Consumption is expected to swell over three-fold over the next decade across renewable energy and electromobility sectors. However, the number of new projects seeking finance for development could easily place the market in oversupply, with large, established producers able to manipulate output. Brine production will control majority supply with expected China chemical conversion capacity bottlenecks generating competitive spodumene market with a strong focus on quality.
- Cobalt: LME probe into ethical, inelastic supply from the DRC is expected to increase the strain on transparent, responsible mining operations and new Australian and Canadian projects. Rapidly rising high-grade premium pricing is elevating the risk of substitution in next-generation lithium-ion batteries.