Evaluating and forecasting the lithium market from a value ...
Transcript of Evaluating and forecasting the lithium market from a value ...
Evaluating and forecasting the
lithium market from a value lithium market from a value
perspective
Robert Baylis
30th January 2013
Disclaimer
The statements in this presentation represent the considered views of RoskillInformation Services Ltd. It includes certain statements that may be deemed"forward-looking statements“. All statements in this presentation, other thanstatements of historical facts, that address future market developments, governmentactions and events, are forward-looking statements. Although Roskill InformationServices Ltd. believes the outcomes expressed in such forward-looking statementsare based on reasonable assumptions, such statements are not guarantees of futureperformance and actual results or developments may differ materially from those inforward-looking statements. Factors that could cause actual results to differforward-looking statements. Factors that could cause actual results to differmaterially from those in forward-looking statements include changes in generaleconomic, market or business conditions.
While Roskill Information Services Ltd. has made every reasonable effort to ensurethe veracity of the information presented it cannot expressly guarantee the accuracyand reliability of the estimates, forecasts and conclusions contained herein.Accordingly, the statements in the presentation should be used for general guidanceonly.
Overview
• Market dynamics:
• Producer market share by value
• Product value and volume
• Product markets:
• Technical products• Technical products
• Battery products
• Organolithium & specialty products
• Market outlook and product impact
• Summary
Market dynamicsMarket dynamics
Sales by company across market area (US$M), 2011/12
Lithium market share by value shows how product diversification can increase turnover substantially
Source: Rockwood Lithium; FMC Lithium; SQM; Tianqi; Talison; Ganfeng; Roskill estimatesNotes: Rockwood LTE 2012; FMC FY 2011;SQM LTE 2012; Tianqi + Talison FY 2011/12;
Ganfeng FY2011; Tianqi + Talison technical salts includes mineral sales
Speciality/metal Organlithium Battery Technical
Cat-grade lithium metal
Butylithium Battery-grade lithium carbonate
Technical-gradelithium carbonate
High purity
lithium salts
Hexyllithium Battery-grade lithium hydroxide
Direct-use minerals
Lithium aluminum Methyllithium Battery-grade lithium Technical-grade
Volu
me
Product groupings can be roughly drawn around specific markets and product types
Lithium aluminum hydride (LAH)
Methyllithium Battery-grade lithium metal
Technical-gradelithium hydroxide
Lithium hexa-methyldisilazide
Phenyllithium Lithium salts, e.g. lithium fluoride
Lithium hypochlorite
Lithium bromide Lithium chloride
Value
Volu
me
Rockwood Lithium: Profitability of selected lithium products, 2012
Profitability is not necessarily restricted to higher priced products, and will vary by producer depending on costs
Source: Rockwood LithiumNote: Size of bubbles represents profitability of products
Complexity, price and market size of selected lithium products, 2012
There are very few areas with which to increase added value in the lithium market, so all avenues are explored by producers
>90% by volume <US$10,000/t
5-10% by volume US$30-40,000/t
<1% by volume >US$1,000/kg
Source: Roskill estimatesNote: Size of bubbles represents size of market in LCE terms; market volume representative
of chemical market only (i.e. not including mineral direct use)
World: Lithium market size by volume and value, 2012 (t LCE and US$)
There is a significant contrast between market volume and market value, with organolithium and other specialty products contributing most to value
Source: Roskill estimates
Technical productsTechnical products
Technical products generally only require one or two process steps
Mineral conversion Brine processing
Lithium carbonateLithium hydroxide Lithium chloride
Mineral production Brine production
Mineral products
Technical-grade
Technical-grade Battery-grade High purity
Battery-grade Low sodium metal High sodium metal
Lithium bromide
Technical-grade
Lithium products for technical markets and their key end-uses
Other salts Lithium
hydroxide
Lithium carbonate Minerals
Air treatment Greases Glass-ceramics Glass
Pool water treatment
Reagents Ceramic & enamel frits & glazes
Ceramics
Construction chemicals
Other Casting powders Glass-ceramics
Volu
me
chemicals
Dehumidification& CO2 removal
Glass Casting powders
Other Aluminium smelting Other
Other
Value
Volu
me
Important factors to consider when supplying technical products
• Market is concentrated in Europe, USA and East Asia, but small volumes are consumed across a large number of countries
• Logistics and distribution networks are critical as volumes generally higher compared to other lithium products (especially when including minerals)
• Consumers may buy material in bulk or bagged; some carry stock, some want “just-in-time”
• Grade may be less critical for some applications, but will vary even within different end-use sectors
• Product form can also vary across end-uses, e.g. particle size
• Consistency and reliability of supply perhaps more important than grade
• Pricing is competitive
Battery productsBattery products
Battery products also generally require only one or two process steps, but feed and quality control is much more rigorous
Mineral conversion Brine processing
Lithium carbonateLithium hydroxide Lithium chloride
Mineral production Brine production
Mineral products
Technical-grade
Technical-grade Battery-grade High purity
Battery-grade Low sodium metal High sodium metal
Lithium salts
Technical-grade
Lithium products for batteries and their markets
Other salts Battery-grade
lithium metal
Battery-grade
lithium
hydroxide
Battery-grade
lithium
carbonate
Lithium-ion electrolytesolutions
Primary batteryanodes
Lithium-ioncathode materials
Lithium-ioncathode materials
Other Rechargeable Primary battery Lithium-ion
Volu
me
Other Rechargeable“primary” batteries
Primary batteryelectrolytes
Lithium-ion electrolytesolutions
Lithium polymer batteries
Other Primary batterycathodes
Other Other
Value
Volu
me
Important factors to consider when supplying battery products
• Market is concentrated in East/South Asia, with lower volumes in Europe and USA, and in a smaller number of countries compared to technical products
• Logistics and distribution networks still critical (especially as volumes grow); metal products require careful handling
• Bagged material prevails to prevent contamination
• Grade is important, but impurities and foreign particles even more so
• Product form can also vary across end-uses, especially for metal products
• Consistency and reliability of supply imperative
• Competition is growing for lower value, higher volume salts (e.g. battery-grade lithium carbonate), but more restricted for higher value products
• Pricing is becoming increasingly competitive
Organolithium, metal and Organolithium, metal and
specialty products
Organolithium and specialty products generally require more process steps
Mineral conversion Brine processing
Lithium carbonate Lithium chloride
Low sodium metal High sodium metal
High purity Lithium salts Organolithium LDA/LAH/LHS
Organolithium and other specialty products and their uses
Other Organolithium Specialty salts Lithium metal
Lithium hydride Polymers High puritycarbonate etc.
Polymers
Lithium aluminium hydride(LAH)
Organic synthesis Lithium inorganics (nitrate, sulphate etc.)
Catalysts
Volu
me
etc.)
Lithium hexa-
methlydialiszide
Agrochemicals Lithium organics (acetate etc.)
Alloys
Other Other Other Other
Value
Important factors to consider when supplying organolithium & specialty products
• Market is varied depending on product and end-use, e.g. catalysts and organoltihium in USA, Europe, East/Southeast Asia and India
• Logistics and distribution networks closer to end markets due to hazardous nature of organic and metal products, and products require very careful handling
• Bagged or sealed material prevails to prevent reaction and contamination
• Products designed and produced to tight customer specification, high level of technical support and R&D
• Consistency and reliability of supply imperative
• Competition is thin, especially for organolithium and high value inorganic and organics
• Pricing is opaque, cost of lithium in process becomes a minor concern
Market outlookMarket outlook
World: Consumption of lithium by end-use, 2000-2017 (t LCE)
Consumption growth may exceed 11%py, even in the base-case scenario, as demand from 3C, EV and off-grid battery markets increase
11%py
10%py
Source: Lithium: Market Outlook to 2017, Roskill Information Services Ltd.
10%py
World: Consumption of lithium by type, 2007, 2012 & 2017 (t LCE)
Non-LIB market to grow 20% by 2017 = 20,000t LCE additional demand
Source: Lithium: Market Outlook to 2017, Roskill Information Services Ltd.
World: Lithium market size by volume and value, 2017
Volume will move upwards for battery-grade salts relatively quickly, but significant value will still remain in specialty products
Source: Roskill estimates
Summary
• A wide spectrum of lithium products are produced to meet the needs of a diverse range of end-uses
• Volume is centered on relatively low priced lithium salts that, for the most part, are straightforward to produce
• Value is however centered on high value metal and organolithium products, which are not so easy to produce; competition in these is limited
• Non- rechargeable battery market forecast to grow by 20% in five years = 20,000t LCE additional requirement
• Rechargeable battery market forecast to grow by ~200% in five years = 90,000t LCE additional requirement
• Incumbent producers will look firstly to capture growth in high revenue generating products
• Secondly they will look at higher revenue generating battery products, perhaps shifting away from technical salts
• Thus potentially leaving new producers to fulfill demand at the bottom of the value chain; progressing downstream as opportunities arise
Roskill Information Services
“Lithium: Market Outlook to 2017”
• New Multi-Client Report Available March 2013 • Pre-publication delegate offer available – save 10%
“Roskill’s Lithium Digest”
• Tracking news and trends in the lithium business• Available quarterly
• Free copies available
Robert Baylis Managing Director; Manager – Minor Metals Research
About the speaker
Robert Baylis is Managing Director of Roskill Information ServicesLtd. Roskill is based in London, UK, and provides reports andconsultancy services on the supply, demand, end-use applications,consultancy services on the supply, demand, end-use applications,trade and prices of industrial minerals, minor metals and steelalloys. Robert joined Roskill in 2006 focusing initially on the cobaltmarket, which, similarly to lithium, was starting to witness significantinterest due to lithium-ion battery and emerging market demandgrowth. He first started researching the lithium market in mid-2008,authoring Roskill’s 11th edition of its multi-client lithium reportpublished in 2009. Since 2009, he has undertaken several single-client research projects on lithium, as well as being a regularspeaker at the Lithium Supply and Markets conference.
Roskill Consulting Group
Global coverageIn recent years we have served clients in the US, Canada, China,Russia, the EU, Japan, Brazil, Australia, South Africa and the MiddleEast. We are experienced in interviewing overseas, with the advantageof having several French, Spanish, Italian, Dutch and Chinese -speaking consultants.
Tracking news and trendsOur primary research is backed up by our uniquely comprehensive in-house information system. This database is a fund of published andunpublished information, collated under 350 file headings, compiledfrom company reports, official national statistics, over 150 leading tradejournals, technical and trade literature and many other reliableinternational sources.
We also subscribe to a range of on-line resources, includingWe also subscribe to a range of on-line resources, includingcomprehensive business information services and a trade database, sothat we can analyse developments in metals and minerals markets asthey happen.
We have a staff of senior consultants, each with many years ofconsulting experience. In turn, they are supported by a team of analystswho are engaged in full-time metals and minerals research.
This means that we are able to offer a wide range of consulting skillscombined with detailed, practical knowledge of the metals and mineralsbusiness today.
WWW.ROSKILL.COM/CONSULTING