Battery Materials Lithium

By pjain      Published June 6, 2021, 10:13 p.m. in blog Invest   

Lithium -- xfr --

ALB SQMI LTHM LAC

Batteries eg for EVs Uses dominate

  • High electrochemical potential and small ionic radius, which makes it uniquely suited for shuttling charges from one electrode to the other inside of a battery.

Other Uses

  • Resistant to high and low temperatures, which makes it a common component in industrial greases and lubricants.
  • Lightweight for alloys: Valuable in high-strength metal alloys, such as those used in fuel tanks for SpaceX rockets.

While the global markets for lithium-ion batteries and energy are still in their infancy, many analysts ex

Supply, Demand Timelines

  • Supplies

  • Refining issues

  • Main issue is extraction, environmental issues and refining
  • Other EV materials like Copper, Zinc, etc in bulk and pure conditions is also an issue

  • LiCarbonate is the standard - brines of LatAm better

  • LOH lithium hydroxide is more and more favored to its ease-of-processing for battery applications.

  • Australia rock deposits better for LOH, and closer to Asia bulk markets

  • Mining and Production Issue

  • World has more than enough LI resources est 210 MMT
  • Li hasn't been a human priority and now new discoveries are being made that could greatly increase this reserves

  • RISKS - all-time peak of $20 per kilogram, cost of production $7/kg - debt load/capex repay forces producers to clear!

  • If producers cannot meet demand quickly enough, prices could soar back to the
  • Overenthusiasm on EV means supply-demand need to be balanced closely - volatile if go out of whack!
  • Selling prices can be volatile as slow production processes are not able to quickly respond to market shocks.
  • Commodity : if demand fails to materialize, prices could slip closer to the marginal cost of production, estimated at about $7 per kilogram for each commodity.
  • Producers can royally screw up market balances, especially considering brine production takes weeks to complete in evaporation ponds,

  • 2025 Lithium Demand Could Triple to 1 MMT/yr of LCE

  • EV use 0.059 MMT LCE in 2011 to rise to 0.650 MMT by 2025, and dominate with 5x from all other uses
  • Grid storage 0.06 MMT LCE
  • Consumer Electronics 0.07 MMT
  • Industrial other 0.14 MMT

  • 2020 Feb

  • lithium carbonate sell for roughly $10 per kilogram on the Asian spot market.
  • lithium hydroxide sell for roughly $13 per kilogram on the Asian spot market.

  • 2019 - global market was oversupplied - demand only 0.285 MMT LCE

  • 65% EV batteries, 18% ceramic
  • World produced 325,000 metric tons of lithium carbonate equivalents or LCE, although demand was only 275,000 metric tons of LCE. An estimated 45% of total production was sourced from brine deposits, while an estimated 60% of the total comprised lithium carbonate.

  • 2018

  • EV use 0.059 MMT LCE

  • 2011

  • 29% ceramic and glass applications, only 27% for battery, remaining share went to various specialty applications.

ALB

  • DIV
  • Capex and ambitious expansion plans haven't helped the dividend stock much in recent years

  • About Albemarle - world's leading lithium producer, has published detailed production and consumption reports for investors to pore over.

  • ALB expects to grow production from 85,000 metric tons of LCE in 2019 to as much as 225,000 metric tons by the early 2020s. That plan would only utilize 60% of the company's available resources, which suggests the stock could have significant growth baked in.
  • Albemarle boasted total annual production capacity of roughly 85,000 metric tons of LCE in 2019. Roughly 45,000 metric tons of that was lithium carbonate in South America, with the balance being lithium hydroxide. After a 40,000 metric ton lithium carbonate expansion wraps up in 2021, the business plans on focusing solely on lithium hydroxide for the foreseeable future -- mostly in Australia.
  • Rapidly could scale 140,000 metric tons of lithium hydroxide on an LCE basis. That would represent roughly 25% of global production of lithium hydroxide in 2025.

SQMI - SQM Chemicals - Lithium mining

  • FY'21
  • end May'21 dropped 10% on election of indep/wingers that likely to reverse policies - more regulation on mining
  • Q2'21 est Sales y+8% $512m EPS $0.25 y+0%
  • weakening gross margins in the lithium business

  • About:Soc. Quimica y Minera de Chile = No 2 Lithium

  • has vast untapped resources
  • company and its 50/50 joint venture partner delayed an expansion of their Mt. Holland project in Western Australia. When completed in 2021, the asset will have the capacity to produce 120,000 metric tons of LCE per year. The deposit contains an estimated 7 million metric tons of LCE.

LTHM

Livent is ramping up capacity of its lithium carbonate assets in South America, which increasingly will be converted to lithium hydroxide (although it, too, announced a production delay). operates exclusively in the lithium brines of Argentina. It produced 20,000 metric tons of LCE in 2019, comprising 17,000 metric tons of lithium carbonate with the balance dedicated to lithium chloride. The company converts the majority of production to lithium hydroxide, which generated 55% of total revenue in 2019. Similar to Albemarle, Livent Corporation's near-term expansion plans skew heavily toward lithium hydroxide.

LAC

Lithium Americas (NYSE:LAC) owns valuable assets in South America in addition to Thacker Pass, the most prominent lithium deposit in the United States.


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