Research Report on China's Lithium Industry, 2018-2022
In 2017, the sales volume of new energy vehicles in major countries reached 1.42 million with a YOY increase of 89.3%; the sales volume of new energy vehicles in China reached 777,000 with a YOY increase of 53.3%. The lithium industry experienced a stable growth before the prosperity of the new energy vehicle industry. However, there is a growing demand for lithium as the new energy vehicle industry booms in recent years.
In 2017, the global lithium salt production was about 235,400 tons, increasing by 21.5% YOY; China's lithium salt production was about 123,400 tons, increasing by 43.5% YOY.
In 2017, the global demand for lithium resources was about 220,000 tons, increasing by about 9% YOY. The growth was mainly because of the increasing production volume of new energy vehicles whose demand for lithium resources reached about 45,000 tons with a YOY increase about 44%.
According to CRI, in 2017, the growth rate of China's lithium battery industry rose significantly with the production and sales volume of new energy vehicles increasing by over 50%, the production of lithium-ion batteries increasing by over 40%, and the total production of cathode materials for lithium batteries increasing by over 50%.
At the end of 2017, China's lithium salt capacity was about 250,000 tons including 178,000 tons of lithium carbonate, 54,000 tons of lithium hydroxide and 18,000 tons of lithium chloride, increasing by 47%. In the second half of 2017, Shandong Ruifu Lithium Co., Ltd. put into pilot production the lithium carbonate production line with an annual capacity of 20,000 tons. In early September, Jiangxi Jinhui Lithium Co., Ltd. launched the production line which can extract 10,000 tons of industrial grade lithium carbonate from lepidolite every year. In November 2017, Qinghai HXR Lithium Tech Ltd. put into trial production the lithium carbonate production line with an annual capacity of 20,000 tons. Jiangsu Baozong & Baoda Pharmachem Co., Ltd., H-zone Lithium Technology Co., Ltd., Jiangte Silver Lithium New Energy Co., Ltd., etc. completed lithium salt capacity expansion projects and put them into operation.
The global lithium resources and lithium mining enterprises highly concentrate in Chile, Argentina, Australia and the U.S. China is rich in lithium resources but is weak in lithium exploitation. Therefore, China has a low production of lithium. For example, the production of lithium metal was only about 2,500 tons in 2017. Large amount of imports is needed every year. Some leading lithium enterprises in China have obtained lithium resources from abroad. For instance, Tianqi Lithium Corporation has acquired Tailison, and Jiangxi Ganfeng Lithium Co., Ltd. has acquired Mt Marion. The market is highly concentrated in China with Tianqi Lithium Corporation and Jiangxi Ganfeng Lithium Co., Ltd., etc. taking up a huge market share.
There are abundant explored lithium resources in the world. However, the poor resource endowment, imbalanced distribution, limited development and extracting technologies and the production cycle restricted by economic and natural conditions have led to the mismatch between supply and demand in a certain period and a rise in the prices of lithium resources. From 2018 to 2022, the price trend of global lithium resources will depend on the pace of capacity expansion. It is still possible that lithium prices will rise in the coming years with the rapid development of global new energy vehicle industry.
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