The Lithium market, upcoming tensions

Global - Nov 16 2018

Weekly food for thought

In the context of the transformation of the automotive sector in response to the challenges of climate change, fossil fuels could be gradually giving way to electricity.

The electric vehicle could represent between 35% and 50% of sales in 2040 according to Bloomberg and the IAE. As a result, the evolution of lithium consumption follows the same trends as the electric vehicle penetration. The total demand for lithium by 2050 is therefore estimated at just over 14 million tons according to a recent study by ADEME and IFPen.

However, according to the USGS, global reserves are currently estimated at about 14 million and total resources at 47 million tons. The margin between future lithium demand and current reserves is therefore currently quite small if ambitious CO2 emission reduction targets are set, but there is no immediate geological criticality for lithium.

Figure: Market shares early 2017 for primary lithium production

However, this does not hide different forms of vulnerabilities that could lead to severe market tensions by 2050. Indeed, according to the recent ADEME and IFPen report, there may already be risks related to the market structure and its potential evolution. As shown in the graph here, the lithium market is currently dominated by a small number of companies (Albemarle, SQM, FMC, Tianqi, Ganfeng), plus a few challengers (Orocobre, Galaxy Resources, Bikita). This concentration of players leads to a high degree of uncertainty about future lithium prices. In addition, the lithium market remains exposed to some notable price volatility risks as, for example, management instruments are not yet available on commodity exchanges (LMEs). Price volatility could thus weaken some small players and lead to even further consolidation between players.

Other factors like the evolution of China’s trade policy, a key player in the lithium market, or the national strategies of the lithium triangle (Chile, Bolivia, Argentina) could be additional constraints. However, this should not lead us to forget the risks we would also face if we do not decarbonize our means of transport.

Félix Fouret, Carbon/Climate Analyst - Sources: Beyond Ratings, ADEME, INFep, Actu Environnement

Read integrality of weekly digest

Our latest
publications

Title
Category
Tag
Country
Date
Weekly food for thought
#Carbon - #Carbon/Climate Change
Global
2019-04-19
Weekly food for thought
#Carbon/Climate Change - #ESG
Global
2019-04-19
Weekly food for thought
#Credit Risk - #GDP
China
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change
Global
2019-04-19
Weekly food for thought
#ESG
USA
2019-04-19
Weekly food for thought
#GDP
Global
2019-04-19
Analyst insight
#Credit Risk - #Sovereign Debt
Global
2019-04-19
Weekly food for thought
#Carbon - #Climate - #IPCC - #WMO
Global
2019-04-19
Weekly food for thought
#Carbon - #Inequality - #Paris Agreement
France
2019-04-19
Analyst insight
#GDP - #Sovereign Debt
USA
2019-04-19
Weekly food for thought
#GDP - #Sovereign Debt
Italy
2019-04-19
Analyst insight
#Credit Risk - #GDP - #Geopolitics - #Sovereign Debt
Global
2019-04-19
Weekly food for thought
#Environment
Global
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #GDP
Global
2019-04-19
Weekly food for thought
#GDP
France
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Environment
Global
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate - #Environment
Global
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate - #Environment
Global
2019-04-19
Analyst insight
#GDP
Brasil
2019-04-19
Weekly food for thought
#Environment
Venezuela
2019-04-19
Weekly food for thought
#Environment - #Natural Capital
Norway
2019-04-19
Analyst insight
#Carbon - #Carbon/Climate Change - #Climate
United Kingdom
2019-04-19
Weekly food for thought
#Agriculture - #Biodiversity - #Climate - #GHG - #Greenhouse gases
Global
2019-04-19
Weekly food for thought
#Biodiversity - #Climate - #Environment - #ESG - #IPCC - #Oceans - #SIDS
Global
2019-04-19
Weekly food for thought
#Credit Risk - #GDP
France
2019-04-19
Weekly food for thought
#Carbon/Climate Change
Europe
2019-04-19
Weekly food for thought
#Carbon/Climate Change
France, Canada
2019-04-19
Weekly food for thought
#Credit Risk - #GDP
Argentina
2019-04-19
Analyst insight
France, Egypt
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate
France
2019-04-19
Weekly food for thought
#GDP - #Sovereign Debt
Germany
2019-04-19
Weekly food for thought
#Environment - #ESG
Global
2019-04-19
Analyst insight
#GDP - #Natural Capital - #Sovereign Debt
South Africa, France
2019-04-19
Weekly food for thought
#Credit Risk - #Sovereign Debt
United States
2019-04-19
Weekly food for thought
#Carbon/Climate Change
Global
2019-04-19
Weekly food for thought
#Carbon/Climate Change - #Environment - #ESG
Global
2019-04-19
Weekly food for thought
#Carbon/Climate Change - #Climate
Global
2019-04-19
Weekly food for thought
#ESG
India
2019-04-19
Weekly food for thought
#Credit Risk - #GDP
USA, Japan, European Union
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #GDP - #Paris Agreement - #Sovereign Debt
Global
2019-04-19
Weekly food for thought
#Climate - #Environment - #Paris Agreement
Small Island Developing States, Global, Barbados, Fiji
2019-04-19
Weekly food for thought
#Credit Risk - #GDP - #Sovereign Debt
Venezuela
2019-04-19
Analyst insight
#Carbon - #Carbon/Climate Change - #Climate - #Credit Risk
Global
2019-04-19
Analyst insight
Global
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate
Global
2019-04-19
Weekly food for thought
#Credit Risk - #GDP
Global
2019-04-19
Analyst insight
#Biodiversity - #Environment - #Natural Capital
Brazil
2019-04-19
Weekly food for thought
#Credit Risk - #Sovereign Debt
United States
2019-04-19
Weekly food for thought
#Carbon/Climate Change
Global
2019-04-19
Analyst insight
#Credit Risk - #Sovereign Debt
United States
2019-04-19
Analyst insight
#Carbon/Climate Change - #Credit Risk - #ESG - #Natural Capital
Global
2019-04-19
Analyst insight
#Carbon - #Carbon/Climate Change
Europe
2019-04-19
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate - #Paris Agreement
France
2019-04-19
Weekly food for thought
#Credit Risk - #Sovereign Debt
Europe
2019-04-19
Weekly food for thought
Global
2019-04-19
Analyst insight
Global
2019-04-19
Weekly food for thought
France
2019-04-19
Weekly food for thought
#Carbon/Climate Change - #ESG
Global
2019-04-19
Weekly food for thought
Global
2019-04-19
Weekly food for thought
Global
2019-04-19
Weekly food for thought
Global
2019-04-19
Analyst insight
#Biodiversity - #Climate - #Environment - #Natural Capital - #Paris Agreement
Global
2019-04-19
Weekly food for thought
United States
2019-04-19
Weekly food for thought
Italy
2019-04-19
Weekly food for thought
Global
2019-04-19
Analyst insight
Middle East & North Africa
2019-04-19
Weekly food for thought
Global
2019-04-19
Weekly food for thought
Global
2019-04-19
Research note
#Carbon - #Carbon/Climate Change - #Climate - #Paris Agreement
Global
2019-04-19
Weekly food for thought
Global
2019-04-19
Analyst insight
All
2019-04-19
Weekly food for thought
United States
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
#Carbon/Climate Change - #Climate - #Credit Risk
England
2019-04-19
Weekly food for thought
Global
2019-04-19
Weekly food for thought
Germany
2019-04-19
Analyst insight
Brazil
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
Italia
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
Canada
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Analyst insight
Sweden
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
Italia
2019-04-19
Analyst insight
All
2019-04-19
Weekly food for thought
USA
2019-04-19
Analyst insight
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
United Kingdom
2019-04-19
Weekly food for thought
United Kingdom
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Research note
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
Russia
2019-04-19
Analyst insight
Argentina
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
European Union
2019-04-19
Analyst insight
European Union
2019-04-19
Analyst insight
Greece
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
European Union
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
Cuba
2019-04-19
Weekly food for thought
All
2019-04-19
Analyst insight
Greece
2019-04-19
Weekly food for thought
European Union
2019-04-19
Weekly food for thought
French Guyana
2019-04-19
Weekly food for thought
#Sovereign Debt
Russia
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
Venezuela
2019-04-19
Analyst insight
All
2019-04-19
Weekly food for thought
United Kingdom
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
France
2019-04-19
Weekly food for thought
European Union
2019-04-19
Weekly food for thought
All
2019-04-19
Weekly food for thought
France
2019-04-19
See more