Shift in UK’s EV policy to boost battery material demand
The British government has brought forward a ban on the sale of internal combustion engine cars in a move which will boost demand for battery materials, including lithium.
UK Prime Minister Boris Johnson unveiled the new date at a launch event for a United Nations climate change gathering. The date of the ban has been moved to 2035 from 2040.
The ban will now include hybrids, which have both a battery and an internal combustion engine. A government spokesperson confirmed to Fastmarkets the ban will also include plug-in hybrids.
William Adams, head of base metals and battery research at Fastmarkets, said the policy “would have a significant impact on battery raw material demand.”
Based on initial estimates, Adams said that if total car sales remained flat, a switch to battery electric vehicles (EVs) by 2035 would boost total lithium demand from the UK car sector to 121,500 tonnes of lithium carbonate equivalent, compared with around 2,300 tonnes of lithium carbonate equivalent in 2019.
On January 23, Fastmarkets’ price assessment for the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price was $8-9.50 per kg, and the price assessment for the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price was $9.50-11 per kg, both on a cif China, Japan and Korea basis. This compares with $12.50-14.50 per kg and $15-17 per kg respectively a year ago. Lithium compound prices have been on a general downtrend over the past year due to oversupply.
Price assessments were rolled over on January 30 due to the Chinese New Year holiday.