if you liked palladium, you'll love lithium - small lithium ion battery

Lithium is increasingly known as a magical metal.
That alone could prompt commodity investors to run a mile.
In the past decade alone, they have witnessed the rise and fall of rare earths and the shortage of rare earths. lived nuclear-
At one point, uranium became the unlikely darling of the market.
However, they should push back their ideas a little further until the end of 1990, with another type of metal: Palladium.
Lithium is the core of the battery that powers the portable device and you can't seem to stop looking for it.
Greater opportunities involve batteries for electric and hybrid vehicles and power storage for homes, businesses and utilities that require a lot of metal rather than an ounce.
In a report published on December, Goldman Sachs raised this question: Your answer may be like this: Wait, didn't you tell me that uranium is going back in 2008?
However, despite the fact that lithium and uranium are touted as critical by their fans in the fight to reduce carbon dioxide emissions, the unique advantage of lithium is that it is rarely mentioned in the same sentence along with words such as "tsunami" or "radiation.
"Isthatif electric and hybrid vehicles with batteries continue to take market share of the internal combustion engine, and the opportunity may be huge.
In a recent report, Citigroup estimates that if sales of battery electric vehicles rose from 150,000 last year to 1 million in 2020,-
About 1% of global auto sales. -
The demand for lithium in the sector alone will increase by about 66,000 tons of lithium carbonate equivalent.
At present, from the iPhone battery to industrial grease, the demand for lithium for all its uses is only about 160,000 tons.
Therefore, the biggest problem is whether the demand for electric vehicles can continue to grow rapidly.
For many people, the prospect of the electric car market starts and ends with Tesla, especially because it has (a)
The best models on the road (b)
Good social media skills are almost frightening.
Fluctuations in Tesla's stock price and cash
Burning concerns may lead you to conclude that electric vehicles are not ready for prime time, especially when the average price of gasoline has fallen below $2 a gallon.
But demand for electric vehicles is more than just a price problem.
If so, then according to Bloomberg New Energy Finance, why did Electric vehicle sales in North America, Europe, China and Japan rise 60% last year?
The answer is regulation. In the U. S.
Support from federal fuel
State and federal efficiency targets for zero subsidies
Emissions cars have prompted many other automakers to try to beat Tesla in their own games.
GM's Chevrolet Bolt will be available later this year with an estimated 200
For miles, $30,000 in subsidies.
This will make it a direct competitor to Tesla's upcoming Model 3, bringing electric vehicles closer to the mass market.
Average price of lithium since 2010
The ion battery pack for electric vehicles has dropped from about $1,000 per kilowatt.
According to Bloomberg New Energy Finance, less than $400 an hour.
BNEF expects prices to fall below $200 in early 2020.
"We have entered a completely different phase, which records the history of raceto developing better vehicle batteries," said Steve Levin, author of Power Station . ".
Traditional car companies are being stimulated to act, he added, partly because they are "scared"Tesla]
Model 3 will take off like an iPhone.
"At the same time, the Chinese government aims to drive 5 million electric vehicles on the road by the end of 2020.
This is in part an attempt to get its domestic automakers ahead of the long-term competition.
By putting their efforts into an area where everyone is still trying to figure out what's going to happen next, a foreign competitor has been established.
But it also reflects China's need to address the choking smog problem, which Beijing is already taking.
It's useful to remember what happened with palladium.
This platinum cousin is used on millions of catalytic converters, which prevents the exhaust gas from being discharged into the air we breathe.
Ford began using palladium in catalytic converters in late 1980, just before the emission standards were again stringent in early 1990.
This, and the world's second-largest shortage of Russian supplies
The biggest producer, led to the eight
The final portion of fold spike at the end of 1990 was canceled because it turned out that Russia's palladium inventory was a state secret, larger than many thought, and the market was flooded.
There is no such lithium reserve.
Parallel here is that palladium has soared because of a set of buyers ---
Car manufacturers-
For regulatory reasons, no matter what happens to the price, no one has to buy it.
In any case, it doesn't matter compared to the total cost of the car: even if it's $1,000 an ounce, palladium in a typical car is worth only about $100 to $250.
Similarly, a Nissan 24 KW.
The hourly battery contains about 45 pounds lithium carbonate equivalent.
Although not (yet)
According to liquid lithium market data compiled by London Benchmark Mineral Intelligence, last year's average price was $6,800 per ton of lithium carbonate equivalent.
On this basis, the lithium cost of the Leaf is about $140, or all of them are 0.
5% of the price.
At the same time, supply lags.
This is not the case of lithium peaks--
Where is the reserve--
But it's not easy to do that.
The cheapest form comes from saline deposits, such as the huge salt bank in the Atacama Desert of Chile, where evaporation is used to extract lithium.
Conventional mining, for example, is a more flexible resource in Western Australia, but also more expensive.
Benchmark Mineral Intelligence estimates that the production cost of salt water deposits is $2,000 to $3,000 per ton, but mining costs exceed $4,000.
Benchmark Mineral Intelligence project lithium carbonate price near peak
Prices in 2017 were nearly $9,000 a tonne, falling as new supplies entered the market.
However, it added that with the opening of new demand sources such as Tesla's gigabit plant in Nevada, this may not be enough.
Industry veteran Joe Lowry now runs a consulting service called Global Lithium.
"Growing up with an overvaluation of lithium," he said, there is now a real shortage, and this year's shortage will get worse due to delays in new supplies.
Lowry estimates that it will take about four years for the new brine deposition to begin.
Contact with lithium is not as easy as other commodities.
The three major producers are SQM in Chile and SQM in the United States. S.
Albemarle and FMC
However, SQM is involved in a legal dispute over the lease agreement, which allows it to operate in the Atacama desert.
At the same time, Albemarle and FMC are specialty chemicals companies, and lithium is only part of the business of these companies (
A very small FMC)
In addition to these companies, the use of emerging lithium industries such as Jiangxi Ganfeng Lithium industry or London in China is also increasing.
Rare earth minerals listed.
The latter may change its name, but there is direct and indirect support in a project in Mexico aimed at developing lithium clay deposits.
The project has reached a preliminary agreement to supply Tesla as long as it is delivered.
Teslano suspects that in order to break the control of the big three, it hopes to encourage more producers to enter the market.
The supply of projects in Mexico is still a few years away, so its appeal in the short term depends largely on rare earth Minerals and project operator Bacanora Minerals, reaching feasibility and development milestones and reducing the risk premium.
Rising demand for prices that are largely indifferent, coupled with lagging supply, is the dream of commodity bulls.
This has supported the prosperity of palladium and the recent bull market for oil and copper.
It seems it's lithium's turn.
Contact the author of this story: bloomberg Denning at ldenning1 @ bloomberg in San Francisco.
NetTo contacted the editor in charge of the story: Mark Gongloff from mgongloff1 @ bloomberg.