Ganfeng Lithium signs supply agreement with BMW
Chinese lithium producer Ganfeng Lithium has signed a long-term supply agreement for lithium compounds with BMW to supply their designated battery or cathode makers, it said on Thursday December 12.
Chinese lithium producer Ganfeng Lithium has signed along-term supply agreement for lithium compounds with BMW to supply their designated battery or cathode makers, it said on Thursday December 12.
This agreement follows Ganfeng’s previous strategic cooperation agreement with BMW signed on September 28, 2018, with the latter supplying lithium compounds to the car maker for five years.
Under this latest agreement, Ganfeng will supply a variety of lithium compounds for battery and cathode manufacturing according to BMW’s requirements at market prices for five years from 2020 to the end of 2024. The contract includes the option to extend the deal from January 1,2025.
BMW said Ganfeng will provide lithium compounds with a total order volume of €540 million ($599 million) over the five-year period.
“The projected order volume totals €540 million. In this way, the BMW Group is securing 100% of its lithium hydroxide needs for fifth-generation battery cells in its high-voltage batteries,” Andreas Wendt, member of the board of management at BMW AG responsible for purchasing and supplier network, said on Wednesday.
“Alongside cobalt, lithium is one of the key raw materials for electromobility. With the signing of this contract, we are securing our lithium needs for battery cells,” Wendt added. “We aim to have 25 electrified models in our line-up by 2023 – and more than half will be fully electric. Our need for raw materials will continue to grow accordingly. By 2025,for lithium alone, we expect to need about seven times the amount we do today.”
Ganfeng also signed supply contracts in 2018 with LG Chem and Tesla to provide lithium compounds, mainly lithium hydroxide.
Demand for lithium hydroxide is expected to increase in the coming years, coinciding with the trend for the development of high performance batteries and vehicles with longer driving range.
Fastmarkets assessed the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, exw domestic China, spot price at 52,000-57,000 yuan ($7,390-8,101) per tonne on Thursday December 5, down from 53,000-58,000 yuan per tonne previously. The spot market in China has been on a downtrend this year, mainly on pessimism for lithium demand in the region due to continuously weak consumption among downstream cathode makers.