Vicky Zhao, Fastmarkets analyst, has commented on the forecast at the Fastmarkets Asian Battery Raw Materials Conference in Singapore.
Xiong Wei, lithium advisor at Traxys, also emphasized at the conference that China’s lepidolite, a hard rock that is typically used for lithium carbonate production, alongside spodumene and brines, is integral to the global lithium supply.
Almost all lithium carbonate produced from lepidolite in China is used in the lithium-ion battery sector. In 2022, energy storage systems (ESS) and new energy vehicles (NEV) were the two largest markets for lepidolite-fed lithium carbonate, with the ESS market accounting for 44% of total demand and the NEV accounting for 40%.
The strong demand from the new energy transition market is expected to continue supporting the demand for lepidolite-fed lithium carbonate.
“Global lithium demand is forecast reach 3 million tonnes per year of lithium carbonate equivalent [LCE] by 2030,” Daniel Jimenez, partner at iLiMarket, said.
Lithium-ion battery demand is forecast to exceed 5,000 Gigawatt hours (GWh) in 2033, according to Fastmarkets’ battery raw materials analyst Phoebe O’Hara.
“China’s lepidolite supply totaled 85,000 tonnes of LCE in 2022 and is forecast to reach 193,000 tonnes of LCE in 2025,” Xiong said.
Global lithium demand is forecast to reach 1,391,000 tonnes of LCE in 2025, while supply is forecast at 1,733,000 tonnes of LCE in 2025, leaving the market with a lithium surplus at 342,000 tonnes of LCE in 2025, according to Xiong.
The strong demand for lithium has recently bolstered the global appetite for lepidolite, despite the mineral failing to attract market attention when lithium prices reached a historical bottom in 2020.
China’s lepidolite production rose by compounded annual growth rate (CAGR)145.26% during 2015-2022, driven by the surging demand from the battery sector as well as the advances in processing technologies, Zhao said.
The surging lithium demand also drove illegal mining of the hard rock, especially in Yichun city, Jiangxi province in China, over the past year. In February, the Yichun government cracked down on the illegal mining of lepidolite in the city.
China’s lithium reserves total 2 million tonnes on lithium metal basis in 2022, with 22 lepidolite mines in China which possessed effective mining rights in 2022, Zhao said.
Fastmarkets’ weekly price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was 200,000-230,000 yuan ($28,901-33,236) per tonne on May 4, up by 30,000-35,000 yuan per tonne from 170,000-195,000 yuan per tonne.
The latest prices have decreased by 64.02% from the historical peak of 590,000-605,000 yuan per tonne on November 17, 2022.
Concerns over quality and ESG
Lithium processors feeding on lepidolite still struggle to produce lithium carbonate that fully meets China’s national standard for battery grade lithium carbonate, due to higher impurities and less lithium oxide content in lepidolite ores compared with spodumene.
The sulfate ion and potassium compositions in the lithium carbonate from two lepidolite producers exceeded limitations set by the country’s national standard, according to Zhao.
“[Potassium, sulfate ion and sodium content exceeding the national standard] is not unique to just these two processors, but is a common occurrence with lithium carbonate which feeds from lepidolite,” Zhao said.
Such lithium carbonate is often referred to as prepared battery-grade lithium carbonate in the Chinese market, meaning that the lithium carbonate composition alone meets the national standard while other chemical compositions exceed standard.
The prepared battery-grade lithium carbonate needs further purification in order to be used in downstream battery application.
Market participants dismissed the practice of lithium hydroxide production feeding from lepidolite directly, citing that the higher quality requirement for lithium hydroxide, which is hazardous and more unstable than lithium carbonate, requires higher and stable feedstock quality.
Spodumene is the typical feedstock for battery-grade lithium hydroxide, but can also be converted from lepidolite-fed lithium carbonate.
On the other hand, delegates at the conference expressed concerns over environmental-social-governance (ESG) related to lepidolite processing.
According to Xiong, fluoride is one of the main pollutants that is generated during the procession of lepidolite into lithium carbonate.
“Hydrofluoric acid is produced during the procession of lepidolite and is highly poisonous,” a Chinese lithium trader said.
A South Korea-based consumer source added: “It is important to deal with the pollutants properly and ensure that lepidolite processing is ESG compliant.”
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