Lithium is primarily used in the battery industry as lithium-ion or lithium-polymer for rechargeable batteries. It also has several industrial applications ranging from heat-resistant glass and ceramics, flux additives for iron, steel and aluminum production, welding alloys in metallurgical industry, and lithium grease lubricants. The first significant use of lithium can be dated back to World War II, where it was used in aircraft engines as a high-temperature grease. Although the use of lithium was going on for a long time, analysts at SpendEdge estimate the lithium market to grow 11% annually during the forecast period. The procurement market intelligence report also states that majority of the lithium produced is exported to China, where it is used for manufacturing products such as batteries, ceramics, and glasses.
Demand Supply Landscape in the Lithium Market
North America
Demand
North America has seen a rapid growth in the demand for lithium owing to the growth of the electric car industry, which relies on lithium-ion batteries. Companies such as Tesla, Toyota, and Panasonic have built large facilities to mass-produce lithium-ion batteries. Tesla’s announcement of the new model 3 and Tesla Roadster has also spiked the demand for such batteries. Additionally, lithium-ion batteries are also extensively used in energy storage in solar and wind power generation. Increased investment in such energy source has affected the demand for lithium.
Supply
North America depends on imports from other surplus regions such as South America and MEA. For instance, the US import 80% of their total consumption volume from countries such as Canada, Chile, and Argentina.
South America
Demand
The demand for lithium in South America is not as rapidly growing as in neighboring North America. This is because the region is highly dependent on ethanol as a fuel source. Nevertheless, some countries in this region are focusing on solar energy, which is affecting the demand in the lithium market. For instance, the government of Brazil has almost completed setting up of its 1.8 GW capacity solar power plant that is expected to produce 1.5 W of power annually from 2018
Supply
In terms of lithium production, South America is the world leader with Chile and Argentina responsible for more than 50% of the worldwide lithium production. The lithium market in this region is flourishing as it exports its lithium to countries such as the US and China, with China investing in the regions lithium reserves to boost volume production.
APAC
Demand
The presence of large-scale industries producing lithium-ion batteries is driving the demand for lithium market in this region. Also, battery manufacturers such as Samsung, LG, Panasonic, and Nippon base their operations in this region. Additionally, the growing demand for renewable energy and ceramics and glass industry is causing the lithium consumption to shoot up.
Supply
Australia is the leading lithium producer in the region. Also, countries such as China, Japan, and South Korea have increased their production volume of lithium significantly in recent times.
Europe
Demand
The demand in the lithium market in Europe has been on the rise considerably due to increasing adoption of electric cars in the region. Majority of the EU countries such as Netherlands and Denmark have announced plans to ban the sale of fossil-fuel based cars by 2030.
Supply
Although Portugal is one of the major production hubs in this region, their demand for lithium exceeds the domestic supply. As a result, most of the buyers procure lithium from regions such as South America and MEA.
MEA
Demand
The growth of renewables industry in this region is mostly limited due to heavy reliance on fossil fuels, lower penetration of emerging technologies, and the high cost of setting up power plants. However, countries such as Saudi Arabia, UAE, and Qatar are spending heavily on renewable energy to decrease their dependence on oil and gas industry.
Supply
Zimbabwe is one of the major contributors to the lithium market in terms of supply. They export lithium to countries such as China, India, the US, and Germany.
Read more about the demand-supply trends in the lithium market along with sourcing strategies, pricing strategies, lithium mining companies, top lithium battery manufacturers, logistics and supply chain issues, and procurement market intelligence in SpendEdge’s upcoming report on the global lithium market.
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