How Battery Chemistry Assumptions Distort Nickel And Cobalt Demand Forecasts - lithium ion battery manufacturers

The original lithium
Sony (NYSE: SNE) used lithium for ion batteries launched in 1991-cobalt-
Oxide or LCO cathode powder weighing about 60% cobalt.
While LCO has been the preferred chemical for personal electronics for nearly 30 years, it has never been considered an advantageous chemical for electric vehicles, since cobalt is both scarce and expensive, the safety record of the LCO battery is also not amazing.
At 1996, lithium-iron-
Phosphate or LFP and lithium-manganese-
Oxide or LMO chemistry is introduced.
Although the energy density of these new chemicals is lower than that of LCO, they are much safer than LCO and are made of abundant pioneer materials.
They are widely publicized as chemicals used by electric vehicles and most early electric vehicles using LFP or LMO batteries.
At 1999, two nickel-
Rich cathode chemistry was introduced: although progress has been slow since 1999 battery developers continued their efforts to reduce cobalt content.
After nearly 20 years of collaborative research and development, manufacturers are currently producing: three Asian battery developers, SK Innovation (OTC: YPF), LG Chem (OTCPK: LGCLF) Samsung SDI (OTC: SSDIY) announced plans to launch NCM-
At some point this year, Cobalt will reach 811.
1% of the weight of cathode powder.
Car manufacturers who want to use NCM-
There are a large number of 811 batteries, including General Motors (GM), BMW (OTCPK: BMWYY), Volkswagen (OTCPK: VLKAF), except for Tesla (tsla pcrff with NCA chemistry) cells.
This chart from Avicenne Energy, a respected battery consultancy in Europe, shows how they expect market share for various NCM formulations to grow from now to 2030.
In general, increasing the nickel content in the cathode formula increases the energy density, but reduces the stability, which means
Between cost and safety.
This chart demonstrated by BASF and Argonne National Laboratory 2014 shows how the stability and cost of the NCM battery decreased with the increase of nickel content and discharge capacity. It’s a trade-off.
You get the best security with NCM in the middle of the triangle111.
When you go to NCM
811 in the lower right corner, the emission capacity increased, but the cost and stability decreased sharply.
The next picture of ACS application materials and interface magazine very well clarifies the stability risk of NCM622 and NCM-
811 cathode chemistry.
As the temperature of the battery increases, the nickel oxide in the cathode powder releases the traveling oxygen.
Because the electrolyte in most lithium
The ion battery is a hydrocarbon, and the addition of free oxygen and Sparks to a sealed container is called a bomb.
Free oxygen release rate and pressure in NCM-
622 batteries may be in manageable safety range, free oxygen release rate and pressure in NCM-
The problem of 811 is much bigger.
In a Joules article of October 2017, Professor Gerbrand Ceder of Berkeley and Professor Elsa Olivetti of the Massachusetts Institute of Technology summarized the gains of key investors as follows: "When NMC
111 has been well established in business, NMC-
NMC-622's recent market introduction
Thanks to its exceptional energy content, 811 is on the road map for cars.
However, it still suffers from a severe decline in production capacity and higher security risks.
We suspect that, within the time frame of our assessment (2025), it will be widely adopted in the electric vehicle industry.
"In my career, I have dealt with hundreds of scholars and researchers, and this is the only time I recall a scholar expressing doubts about achieving the ideal goal within eight months. year timeframe.
Recently, Marc Grynberg, CEO of Umicore, has spoken bluntly about why battery manufacturers cannot design cobalt from their products.
"If you increase the proportion of nickel, you will reduce the stability of the battery, thus affecting the cycle life and the ability to charge quickly," he said . ".
"Cobalt is an element that makes up for the lack of nickel stability.
There are no elements better than nickel to increase the energy density and there are no elements better than cobalt to stabilize the material.
So, when you hear about designing cobalt, it won't happen in the next 30 years.
It doesn't work at all.
Based on everything I have read, I believe NCM-
In the next few years, 622 is likely to become an important battery chemical for electric vehicles.
I believe NCM-
811 may become important if key technical barriers can be overcome, and I don't think the result is imminent or there is no guarantee.
I also think the additional reduction in cobalt in nickel in the future
It is unlikely to have a rich cathode formula.
On July 20, 2017, UBS published the title "NICKEL: The big winner of electric vehicles?
The report provides an overview of the nickel market and explains that more than half of the nickel production worldwide is sufficient for stainless steel but not for batteries.
The coolest part of the report is the part that contains the battery model of ubs.
When I reviewed the UBS battery model, I noticed that the growth rate of electric vehicle sales they assumed was consistent with most other forecasts.
The first surprise came when I reviewed the "cathode chemical share" section, which showed a rapid decline in LFP, the NCA remained relatively stable and the NCM made up for the shortfall.
The real shock happened when I saw the NCM --
In three years, 111 dropped from 30% to zero, NCM-
622 has not yet entered commercial production, but reached its peak in 2020 and then dropped rapidly, NCM-
811 was put into production in 2020 and became "a chemical that rules all chemicals" in 2025 ".
Assuming NCM from UBS-
811 will be the dominant chemical reaction in a very short time, which is obviously out of sync: I decided to recreate the UBS battery model in the Excel spreadsheet, add parts for the cathode chemical lithium strength and cathode chemical cobalt strength, and conduct sensitivity tests to see what happens.
I have uploaded the spreadsheet to my Dropbox. CLICK HERE.
I ran two sensitive cases for simplicity, one NCM-
811 reflects the leading case of UBS hypothesis and NCM
622 the main cases of the above-mentioned skepticism are reflected.
The table below summarizes the growth in the demand for nickel, cobalt and lithium in both cases.
Although the difference in nickel demand in the future is relatively small, 746 ktpy and 582 ktpy, the difference in cobalt demand in the future, 98 ktpy and 184 ktpy, in the world where about 104,600 tons of refined cobalt were produced last year, that number is huge.
Of the 104,600 tons of cobalt produced by the World refinery last year, about 9,000 tons were used for electric vehicle batteries and the rest for high
The value of industrial applications and batteries for electronic products and other portable devices.
High when the cobalt cliff comes
The value of industrial applications and batteries for electronics and other portable devices will be much lower than the cost sensitivity of the electric vehicle market.
So from my point of view, the only thing electric car manufacturers can rely on is that there is no surplus that others want.
While the two major projects in Congo (Kim), The Roan tailings project of the Canko Katanga mine and Eurasian Resources, will ease the cobalt shortage in the coming years, in the most optimistic chemical scenario imaginable, their combined production capacity of about 47,000 tpy in the future accounts for about half of the expected growth in demand in the electric vehicle battery industry.
In more likely cases, NMC-
811 does not dominate, and the total capacity of large projects will represent about a quarter of the projected growth in demand in the electric vehicle battery industry.
As more and more junior mining companies step out of the shadows and announce new exploration projects, it is expected that only three hobby-scale projects will produce cobalt by 2025, compared to the shortage, their collective capacity is 6,700 tpy.
Comment 2017 on its new "cobalt market-
Denton Commodities said: "Do we think we are moving towards the 'cobalt cliff 'predicted by some market commentators '?
These figures show that as demand grew by 2017 to 103,900 tons, it was offset by an increase of 104,600 tons per unit of refined oil supply.
With Glencore's Katanga assets listed in 2018, and Erger's RTR assets listed in 2019, there may be a surplus in the market until the index of electric vehicle sales is expected to grow by more than 2020.
However, since no new and meaningful cobalt assets were put into use at the time, a large production/consumption deficit seems guaranteed.
On this longer basis
The short-term outlook is more likely to be any Near
Long term remaining supply will be advanced
Larger consumers buy and store in large quantities to anticipate a more serious supply deficit in the future.
"Most automakers in the world will accept the cobalt cliff as an inconvenience, delaying their plans to partially power up the new car fleet they announced.
They will not be happy with the situation, but they will calmly cope with the limitations of natural resources and continue to make money by making and selling traditional cars.
Tesla and other pure electric vehicle manufacturers will be pushed to the wall and will most likely be driven out of power as they are not able to cope with the ongoing shortage of raw materials by making other products.
At this point, owning a stake in Tesla is a bet on the first order, because without a Deus ex Machina miracle that makes cobalt irrelevant to the electric car manufacturer, the company can't
Cobalt may be a bridge material before something better appears, but bridges that are not long enough are called docks.
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