Andy Leyland: Lithium Hydroxide Demand and Oversupply Worries

TL;DR

Andy Leyland from Benchmark Mineral Intelligence discusses factors affecting lithium prices, demand forecasts, the importance of nickel in batteries, and the impact of recycling on the market.

Transcript

priscila beretta with the investing news network and here with me today is Andy leyland head of forecasting at benchmark mineral intelligence Andy thank you so much for joining us today thank you great to be here all right so to start can you let us know what your role is at benchmark and a little bit about your background sure I've been commoditie... Read More

Key Insights

• 🧑‍🏭 Negative market sentiment about lithium oversupply disregards factors like conversion capacity and certification issues, keeping the market tight.
• ✋ Demand for lithium hydroxide is increasing due to higher nickel cathode materials, creating a supply imbalance.
• 😑 Lithium-ion batteries are expected to dominate the electric vehicle market in the forecast period, but other technologies may gain traction in off-grid storage.
• ♻️ Recycling is a crucial factor that could impact the market, depending on the end-of-life battery cycle and economics.
• ✋ The nickel market is experiencing significant interest and growth due to its usage in higher energy density batteries.
• 🤪 Benchmark Mineral Intelligence's analysis goes beyond 2025 to provide insights into the lifecycle of investments and technological advancements.
• 🔋 Efficiency gains for lithium-ion batteries are limited, but improvements can still be made in the battery pack side of the market.

Questions & Answers

Q: What factors will drive lithium prices in the next two years?

Andy Leyland explains that plant readiness, conversion capacity constraints, and demand for lithium hydroxide contribute to maintaining lithium prices in a reasonable range.

Q: Will lithium carbonate and hydroxide prices converge?

According to Leyland, lithium hydroxide demand is higher due to its usage in batteries with higher nickel cathode materials. Certification issues for new lithium types maintain market tightness.

Q: What is the lithium demand forecast for the next few years?

Benchmark Mineral Intelligence anticipates a quadrupling of supply and demand in the lithium market by 2025, primarily driven by electric vehicle and stationary storage demand.

Q: How important is nickel in batteries, and what are the concerns regarding supply?

Nickel's significance is growing due to the substitution away from cobalt in batteries. However, there are concerns about the availability of class one nickel and high-grade graphite for anodes.

Summary & Key Takeaways

• Andy Leyland heads the forecasting department at Benchmark Mineral Intelligence, focusing on battery raw material supply chain analysis and maintaining supply-demand cost models.

• Factors like conversion capacity, plant readiness, and demand for lithium hydroxide impact lithium prices, leading to a misconception about oversupply.

• Demand for lithium hydroxide is increasing due to the shift towards higher nickel cathode materials, but certification issues keep the market tight.

• Benchmark Mineral Intelligence forecasts a quadrupling of lithium demand by 2025, highlighting the significance of nickel and graphite in battery production.