Does the World Have Enough Lithium?

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The International Lithium Association, or IFIA, is a nonprofit organization dedicated to advancing the use of lithium in the global marketplace. The ILA was formed in 2004. IFIA has six world conference centers that bring together countries that produce, export, and use lithium. At these conferences, scientists present research and current information regarding the lithium market, which is largely untapped. IFIA’s mission is to promote worldwide cooperation in order to preserve the dwindling supplies of this vital metal.

world lithium

Global lithium production growth is outpacing lithium consumption. It is projected to plateau during the next five years, resulting in slower growth and depleted reserves. Since lithium is one of the world’s most abundant metals, it is critical that efforts are made to preserve and increase global lithium supply. The ILA projects that global lithium production will increase from two to three percent a year through the next ten years, providing a sufficient supply to meet projected future demand. However, some analysts cast doubt on the ability of current supply levels to meet future demand. The ILA projects that by the end of the decade, global lithium demand will exceed supply.

Does the World Have Enough Lithium?

The ILA projects that by the end of the decade, global demand will exceed supply. If this occurs, increasing demand will drive up prices and demand will exceed supply, driving prices up even further. International Lithium Exchange rates are the only factors that have been able to keep prices stable, despite increasing demand. The cost of lithium carbonate should remain stable, especially given the investments in research and development needed to meet growing demand. But the price of lithium is still likely to continue to rise, potentially causing a situation where it becomes necessary to invest in increasing production capacity.

How Will Production Change?

The recent spike in global lithium production came as a surprise to researchers. It was not expected that North America would be the primary source of worldwide demand growth. But according to ILA, there are several possible reasons for the unexpected surge in production. One is the decision by Samsung to begin commercial production of lithium hydroxide at its factory in Australia. The factory is located in south eastern Australia and is expected to start producing the main ingredient of a lithium-ion battery in late 2019.

By the time that Australia begins production of lithium carbonate, it is estimated that the world’s consumption of lithium will increase by five percent annually. By 2027, world consumption is expected to reach six percent annually. When combined with demand growth in Asia and a slowing of world economic growth, it is projected that annual lithium shipments will continue to climb. In the meantime, countries in Latin America and Europe, which account for about half of the world’s consumed lithium, will also see increases in their lithium consumption.

Is Production Gaining Momentum?

With increased global demand, and an aging population that continue to produce fewer babies than expected, the need for lithium is expected to grow faster than supply. As this occurs, prices should remain competitive until at least the middle of the next decade. For now, however, prices have remained relatively stable as the supply is increasing. Brazil, for instance, accounts for a large percentage of the world’s current lithium demand while Spain, India, and Norway follow close behind.

Will Demand Continue to Outpace Supply?

In a speech in South Africa in March, Albemarle expects that global lithium demand will continue to outpace supply by at least a decade. The company projects that after the second half of this decade, the world will have enough lithium to meet its existing demand as well as future projected demand. However, it is important to note that the forecast does not take into consideration the potential impact of new car technologies on the global lithium market.

Will Production Pick Up After That?

Although the company does not expect the world to run out of lithium, it does project that the current demand will increase after then. In its own estimation, the world’s current annual production of lithium will top out around five metric tons. If current consumption trends continue, the company forecasts that the amount of lithium available for sale on the market will reach between five and seven metric tons by the end of this year, which is well within the company’s existing margins.