Tag: Batteries

Lithium Fever: Are Skyrocketing Prices Set to be The Latest Bubble?

Lithium Fever: Are Skyrocketing Prices Set to be The Latest Bubble?

After rising aggressively, some would argue that lithium prices have already peaked.
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Reuters quotes Paul Robinson, director at consultancy CRU Group saying that prices have little upside because demand growth has been met with aggressive supply build up, similar to rare earths and vanadium in past cycles. Even though demand is projected to soar 60% to 300,000 metric tons of lithium carbonate equivalent (LCE) annually by 2020, the newspaper quotes a National Bank Financial report saying new players could flood the market.

Strong Demand is Company, 60% Growth is a Crowd

“It’s crowded, no doubt about it, and it will get culled,” said Jon Hykawy, president of Stormcrow Capital, calling lithium, the “latest bubble sector.”
An indication of extent to which lithium fever has gripped investors and junior miners is illustrated in a Bloomberg article which reports that in the wake of President Mauricio Macri’s decision to remove currency and capital controls and taxes introduced by his predecessors, about 40 foreign companies began to consider opportunities in Argentina’s mining industry. More than half of those planning to mine lithium.
The country may be about to flood the market with lithium the newspaper reports and while not all the projects are likely to go ahead, if they did output would reach 165,000 tons/yr or about 45% of predicted global supply by 2021, according to government projections. Currently global supply is just 185,000 metric tons, illustrating the rate at which demand is expected to rise.

Beware Lithium Fever… Just like Pac-Man Fever Before It!

Much of the enthusiasm for investment in more lithium production is fueled by a belief electric vehicle battery demand is about to take off.
[caption id="attachment_83669" align="alignnone" width="300"]Lithium battery demand Source: Bloomberg News.[/caption]
Taken in addition to new projects being planned in Chile, the U.S., Australia and elsewhere and that surge of new supply becomes a torrent, potentially leading to a collapse in prices.
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While lower lithium prices would be good for battery costs, too much of a fall would be bad for the industry. What it needs is stability to encourage responsible and well-funded investment for the long term, not boom and bust

Believe the Lithium Hype? As a Future Power Source, It Has Legs

Believe the Lithium Hype? As a Future Power Source, It Has Legs

I was asked recently if I thought the world was going to run out of lithium.

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It was the type of question that illustrates the fever that is gripping this small and specialist market, much as the hype that drove rare earth elements through the roof a few years ago and briefly allowed a flood of investment to be available for the development of new mines and processing operations such as Molycorp’s Mountain Pass, only for the market to then collapse again a year or two later.

Don’t Believe the Hype?

An Economist article underlines the case regarding lithium. Much of the recent hype is due to a doubling of lithium carbonate prices imported into China in the last two months of 2015 and comments by analysts from places such as Goldman Sachs calling lithium the “new gasoline” reflecting their opinion that electric vehicles are about to take off — in sales terms, not literally.

[caption id="attachment_76357" align="aligncenter" width="550"]Is the investment hype over lithium-ion batteries justified? Source: Adobe Stock/bbbastien. Is the investment hype over lithium-ion batteries justified? Source: Adobe Stock/bbbastien.[/caption]

Yet sales of lithium salts such as lithium carbonate and lithium hydroxide make up a market of only about $1 billion per year, small when you consider — like rare earth elements — their ubiquitous presence in just about every electronic gadget. All-electric cars and, increasingly, power tools and products previously powered by nickel-hydride batteries use lithium.

Even Toyota is reportedly offering its Prius with lithium-ion batteries now instead of the heavier nickel metal-hydride that has been used since the car’s launch. Supporters of the global shortage camp point to two main development trends to support their case:

Automotive Demand

Developments such as Tesla’s Gigafactory in Nevada which hopes to supply lithium-ion batteries for 500,000 cars within five years, or the new GM Bolt which is said to offer gasoline levels of range and affordability, as inflection points in demand.

As with so many commodities over the last decade, Chinese demand is a great unknown but supporters point out that in ten months last year Chinese firms sold more electric vehicles than Tesla has since 2008 with Chinese firms such as state owned CITIC moving into the supply chain and buying into mines in South America to secure long-term supplies.

Electrical Power Generation

The rise of renewable energy sources and the threat of carbon pricing are encouraging utilities to look at ways of providing peak power without operating stand-by coal or natural gas power plants.

The Economist points to the example of AES Energy Storage, a big provider of energy storage, who won a contract in 2014 to provide a “peaker plant” in Southern California that will provide up to 100 megawatts (MW) of power into the grid at moments of maximum demand.

In December, the firm agreed to buy, over several years, enough lithium-ion batteries from LG to provide ten times this level of peak power — that is, 1 GW, or the equivalent of an entire, modern coal or natural gas-fired power station.

Believe the Hype

Indeed, California is said to have ordered its electricity firms to offer 1.3 GW of non hydroelectric storage capacity within five years, more than double the 0.5 GW of batteries plugged into grids around the world today. On the domestic front, it remains to be seen how popular Tesla’s “Powerwall” electricity storage devices become, but, doubtless as the price comes down through competition and technology improvements, they will prove popular in countries where solar panels can supply domestic power economically such as Australia and the southern US, or where power supply is intermittent like in India or South Africa.

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So, the immensely bullish indicators are true and not, well, bull. The market is looking good for lithium even though the technology still needs considerable improvement to achieve truly large-scale uptake.

Even if Demand Rises, Peak Lithium is Far Off

This is part two of a series on the potential of lithium for energy storage and the investor reaction. See part one first if you missed it.

California is said to have ordered its electricity firms to offer 1.3 gigawatts of non-hydroelectric storage capacity within five years, more than double the 0. 5GW of batteries plugged into grids around the world today.

It remains to be seen how popular Tesla’s “Powerwall” electricity storage devices will become, but as the price comes down through competition and technology improvements they will prove popular in countries where solar panels can supply domestic power economically such as Australia and the southern US, or where power supply is intermittent as in India or South Africa.

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So, the market is looking good for lithium even though the technology still needs considerable improvement to achieve truly large-scale uptake. As the Argonne National Laboratory in Chicago is quoted in the Economist as saying, large-scale batteries need to offer hundreds of miles of driving range, be rechargeable in minutes instead of hours, and provide power at costs comparable with natural gas before they can take off. In the meantime, though, supplies of lithium are not, as was the case with rare earths, held in the stranglehold of one country. As this graphic courtesy of the Economist shows, supplies are already well established from several stable, developed mining countries.

[caption id="attachment_76323" align="alignnone" width="429"]Lithium_sources Source: US Geological Survey.[/caption]

Lithium minerals have been used for years in the ceramics and glass industry according to the US Geological Survey, so extraction is not a new technology and nor is the supply chain undeveloped.

Rapid growth in demand, should it occur, could provide a squeeze on supplies and a rise in price, but the world is not short of lithium and additional supply is very price and demand dependent. Meaning if prices rose, supply would too.

Australia and Chile are the two largest producers but next door Bolivia holds even more deposits than Chile and, indeed… China.

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Destined to be a major producer of batteries and both producer and consumer of devices using lithium, China is already a significant source and holds substantial naturally occurring reserves. So, lithium prices clearly have more upside potential than down, but is the world going to run out of it? Will supply limit the technology or drive prices to unsustainable levels? Can any one supply source restrict supply in a rare earth monopolistic move?

No, highly unlikely. I’d rather be in lithium than say nickel, today, but we shouldn’t worry we are at peak lithium.

How Will the Tesla Home Batteries Work? Chinese Yuan May Get IMF Approval

New metal technologies play a key role in all we do here at MetalCrawler and none could be more promising than Tesla Motors‘ line of batteries for the home. The Chinese yuan may also be on the cusp of being declared not manipulated by the International Monetary Fund.

Tesla Home Batteries

The idea is that homes and businesses powered by solar panels could harvest and store energy during the day that could be used to run homes at night, or be used as a backup during a power outage.

Why Manufacturers Need to Ditch Purchase Price Variance

Although the exact technology involved in the battery, called Powerwall, is a closely guarded Tesla secret, it probably isn’t based on revolutionary concepts, Jordi Cabana, a chemistry professor at the University of Illinois at Chicago told Live Science. Cabana studies new battery materials and said the batteries look as if they are based on the same lithium-ion batteries in Tesla’s cars.

“Just looking at the specs that they publicize, it doesn’t look very different — in terms of the cost — to what they’re putting in their cars,” Cabana said.

The company is also planning to unveil a business-based battery-storage system, called the Powerpack, though the price for that system has not been released yet. Tesla is already taking orders for its residential system, but the products won’t ship until late summer, company representatives said at the news conference.

IMF Close to Calling Chinese Yuan ‘Not Manipulated’

In what would be a blow to US manufacturers, particularly steelmakers, the International Monetary Fund is close to declaring China’s yuan fairly valued for the first time in more than a decade, according to the Wall Street Journal, a milestone in the country’s efforts to open its economy that would blunt US criticism of Beijing’s currency policy.

The fund’s reassessment of the yuan—set to be made official in IMF reports on China’s economy due out in the coming months—follows years of IMF censure of Beijing’s management of the currency.

What Next After Lithium-Ion Batteries, Magnesium? Sodium?

What Next After Lithium-Ion Batteries, Magnesium? Sodium?

Barely a week passes without some snippet of news from one university or research lab hitting the media about another battery development heralding a major breakthrough in technology.

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To gauge by the number of announcements we should be enjoying unlimited storage at near-zero cost by now, but according to the journal Nature the reality is the energy density of rechargeable batteries has risen only six-fold since the early lead–nickel rechargeables of the 1900s.

Strong Lithium-Ion Batteries

Modern lithium-ion batteries are ten times cheaper than the first commercial versions sold by Sony in 1991 but, in terms of energy density, Nature says they don’t hold much more than twice as much energy for a given weight. This raises a key issue for some applications: for grid storage, density is not an issue. Capital cost, maintenance and longevity or recharging cycles are paramount.

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