By Sophie Lu, BloombergNEF
The previously anticipated 'tsunami' of lithium supply may not materialize as miners pullback on new capacity additions in the face of mounting technical and regulatory challenges, as well as shortfalls in financing.
Lithium production capacity can reach 424,000 metric tons lithium carbonate equivalent (LCE) this year, according to BloombergNEF forecasts. That is only a 5 percent increase over 2018, and significantly lower than the estimated 227,000 metric tons LCE of new nameplate capacity that was to be commissioned, as per the announcements of lithium producers. BNEF forecasts global lithium demand to reach 430,000 metric tons LCE by 2020. The global lithium market will be comfortably supplied through 2020. After 2021, producers have significant flexibility to accelerate or delay new capacity additions to support lithium prices.
BloombergNEF global lithium supply and demand forecast
Tianqi Lithium Corp. and Ganfeng Lithium Co. are the most visible Chinese lithium producers, controlling 4.6 percent and 7.4 percent of the global mined lithium market respectively in 2018. However, most of their lithium resource holdings are overseas, not in China.
China is the third largest producer of mined lithium, according to the U.S. Geological Survey. Producers whose lithium resources are primarily located in China include Qinghai Salt Lake Lanke, partially owned by BYD Co., Western Mining Group and CITIC Guoan Co. Ltd., which controls the largest lithium mine already in production in China. Driven by government backed research and development, and cheap capital, producers in China target a doubling of capacity by 2020. If successful, they could increase China's share of global lithium mine capacity to 15 percent.
Producer controlled lithium mine nameplate capacity by 2020
