With the rapid development of electric vehicles, battery metal raw materials may face shortages?
'By the mid-2020s, battery raw materials may face a shortage of supply.' Recently, a research report by Gavin Montgomery, the director of battery research at WoodMackenzie, a British consulting organization, put forward this view. In every battery, there is at least one complex metal chemical composition, such as cobalt, lithium, nickel, etc., and the development trend of electric vehicles is increasing the demand for these metals. Gavin and his team predict that the demand for battery raw materials will achieve a double-digit increase in the next 10 years. So, what does the future long-term development prospects of battery raw materials mean for the penetration rate of electric vehicles, the metal supply chain, and the companies investing in the industry? Multiple factors boost the demand for battery raw materials. Gavin said that under the combined use of multiple factors, the demand for battery raw materials is rising. Last year, total sales of electric passenger vehicles, including hybrid vehicles, rose by more than 24%. By 2025, global electric vehicle sales will account for 7% of total passenger vehicle sales, 14% in 2030, and 38% in 2040. Most automakers even plan to fully produce electric vehicles by 2050. At the same time, from the mid-term development point of view, the size of the battery pack continues to increase. With the increasing production scale of NMC811 batteries, the demand for nickel has increased, while the demand for cobalt and lithium has declined. 01. Lithium prices are falling. Since June 2018, the spot price of lithium carbonate has fallen by nearly US$7,000/ton. It only took a few years for the battery industry to become the biggest driving force for lithium demand. Lithium ions are inseparable in every type of lithium-ion battery. This means that by 2030, the annual rate of increase in lithium demand will reach double digits, and the demand for lithium-ion batteries for vehicles will account for more than 80% of total lithium demand. 02. The price of cobalt has plummeted. Same as that of lithium, the price of cobalt has also fallen in the first half of 2019. Lower prices may delay the progress of some mining projects. But it is expected that until 2024, the industry will still have to deal with the problem of oversupply of intermediate products. Although the supply of cobalt is challenging in the long term, the use of high-nickel batteries in electric vehicles means that the supply gap seems to come more easily than previously expected. 03. Indonesia has become the key to nickel development. Although the battery industry's demand for metallic nickel is much lower than other metals, it will also be a challenge to supply the amount of nickel required for electric vehicles in the mid-1920s. The low nickel price hinders the development of related projects, and because the product delivery cycle is often as long as 10 years, it is now necessary to invest in nickel. At present, Indonesia's nickel production is continuously rising. While serving the stainless steel industry, it is also serving the emerging power lithium-ion battery industry. 04. Graphite will still maintain the balance of supply and demand. Regarding graphite, there is no big problem in maintaining the balance of supply and demand. Although the current and future demand is huge, due to the continuous increase in supply from East Africa, there will be no supply challenges in natural graphite flakes. In view of the new regulations of the International Maritime Organization (IMO) in 2020 and the rise of my country's steel industry, synthetic graphite faces even greater challenges. 05. Manganese is the core of NMC batteries. The manganese industry is mainly driven by the steel industry, so no matter how many electric vehicles there are on the road, this situation is unlikely to change. Furthermore, although a stable supply of manganese sulfate is essential to NMC battery manufacturers, it is expected that there will be no supply problems with manganese metal. Gavin pointed out that at present, meeting the demand for key metals is not a challenge, because supply will change with demand. But increasing the penetration rate of electric vehicles by 10% or more is completely different. Will the current declining pipe metal prices and weak market sentiment put the global economy into a crisis in the future? Unless battery technology can be developed, tested, commercialized, manufactured, and integrated into electric vehicles faster than in the past, all electrification and internal combustion engine bans will be impossible to achieve.