Is Lithium Battery Price Likely to Become More Expensive in 2022?

The main lithium battery raw material includes lithium, nickel, manganese, cobalt and graphite.
We were alerted that these lithium metal prices are soaring rapidly in 2021.
The price of lithium surged 91.4% from Jan. 1 to July this year, the prices of cobalt, copper and aluminium jumped 63.1 %, 30.3 % and 25.5 % respectively which were all core materials used in battery systems. Raw materials such as lithium and cobalt usually account for 30-45% of battery cell costs.

According to the below trading analysis that we can see a continued price increase for cathode material of lithium-ion batteries.

The rise in raw material prices is because of a surging EV demand. It is reported that a total of 592,400 EVs were sold worldwide last month, up 144 % from a year ago. This year’s EV sales volume is estimated at 6.1 million units, up 187 %from a year earlier.
Some experts pointed out that the fast-growing EV demand is forecast to result in battery supply shortages. The global EV battery supply is likely to become insufficient again in 2025 and the shortage is likely to be exacerbated in 2026 to 2030,”

The COVID-19 pandemic causing by the global chip shortage. Such shortage ongoing crisis impact more than 160 industries which also effecting the EV BMS that was consist of a major cost in the lithium battery system.

In view of the above factors that foresee the lithium battery price would still in the high side in the next two or three quarters.
Let’s see what’s major findings to the key raw material of lithium battery from Bloomberg and how they judge the situation as well as the trend for next few years.

1.Battery demand will grow strongly this decade: By 2030, the estimated annual demand for lithium-ion batteries will pass 2.7TWh, largely due to higher demand from passenger EVs.

2. Lithium well-supplied up to 2025: The carbonate and hydroxide should be sufficiently supplied until at least 2025. Hydroxide could face a shortage by 2027, as demand for high-nickel chemistries surges. One key risk is that about 35% of the projected supply growth from now until 2025, will come from integrated spodumene-to-hydroxide converters in Australia.

3. Lithium prices to rise further but plateau by 2022: Lithium prices continued to rise in 2021 due to the restraint in supply as a result of the pandemic and the higher demand recorded in China and Europe. Lithium prices have climbed 71% for carbonate this year, 91% for hydroxide and 58% for spodumene concentrate. Bloomberg expects all prices to continue their rally but gradually plateau as more supply come online in 2021-2022.

4. Nickel prices to hold steady: At the start of the year, Bloomberg predicted that the nickel market will move into a two-tier system for nickel pricing to further incentivize investment into additional Class 1, battery-grade nickel supply. At the end of the first half of 2021, there has been no concrete developments toward this much-needed change in the dynamics of pricing in the nickel market. Prices will likely remain within $18,000 per metric ton for 2021.

5. Cobalt price to hold: Cobalt metal prices have risen by 42% year-to-date on the London Metals Exchange. In March, it rose to $53,000 per ton. This is the highest price since March 2018 and 15% above the five-year average. The cobalt metal price could average $45,000 per ton year-end 2021. With the market projected to be relatively in surplus this decade, Bloomberg expects prices will hold at an average of $44,000 per ton up to 2025.
6.Manganese supply recovers strongly: Manganese production in South Africa in April increased by 208% year on year. The market has recovered strongly from the impact of Covid-19. In spite of the resumption of mine operations in South Africa, the industry has been saddled with challenges associated with haulage, electricity reliability and port operations.

7.Graphite demand to grow: Graphite demand from lithium-ion batteries is set to rise year-on-year by 37% to 446,914 metric tons in 2021, It estimates will grow by 297% by the end of the decade. Commercial vehicles will represent the fastest growth, with year-on-year demand doubling in 2021. Overall, graphite demand from lithium-ion batteries will reach 446,914 tons in 2021.

Based on the data from the press release, how’s your expectation for lithium-ion battery price in 2022?

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