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Australia sees lithium production surging in coming years, headwinds for exports in short term

  • Wednesday, April 3, 2019
  • Source:ferro-alloys.com

  • Keywords:Australia,lithium, production, surging
[Fellow]Australia sees lithium production surging in coming years, headwinds for exports in short term

[ferro-alloys.com] Australia's lithium production is expected to surge in coming years amid growing global demand for electric vehicle batteries, but headwinds remain for exports in the short term, Australia's Department of Industry, Innovation and Science said in its latest report.

The country's lithium production is expected to rise to 272,000 mt lithium carbonate equivalent in the current fiscal year that ends June 30 from 251,000 mt the year before, and is forecast to rise further to 318,000 mt in fiscal 2019-20 (July-June) and to 335,000 mt in fiscal 2020-21, the department said in its latest Resources and Energy Quarterly report.

By fiscal 2023-24, it projects production to have risen to 419,000 mt.

"Export volumes are projected to track with production, since Australia has minimal domestic use of spodumene. However, export values are expected to follow a more mixed trajectory; facing headwinds in the short term as oversupply leads to lower prices, but gaining strength closer to 2024 as lithium hydroxide refineries commence production," the department said in the report.

Australia's export volumes of spodumene concentrate -- the precursor for lithium -- are forecast to rise progressively over the next two years from 1.13 million mt in fiscal 2017-18 to 1.84 million mt in fiscal 2020-21. In the subsequent three fiscal years it is projected to rise to 1.7 million mt, 1.83 million mt and 2.07 million mt, respectively, it added.

A global supply surplus is expected until 2022 due to bottlenecks in refining and conversion and suppliers will need to chose between selling at a loss and curtailing output during that period, the department said.

However, rapid growth in demand is expected outpace supply and result in a deficit by the early 2020s, with a second wave of added supply entering the market in response by 2024, it said.

The surplus in global lithium carbonate equivalent production to consumption is expected to narrow from 403,000 mt versus 264,000 mt in calendar 2019 to 420,000 mt vs 349,000 mt in 2021, the department said.

This is expected to swing to deficit in 2023 when production of 545,000 mt is overtaken by consumption at 594,000 mt, then widen further to 686,000 mt vs 832,000 mt in 2024, it added.

The department forecast spodumene prices falling from $720/mt in 2019 to $517/mt to 2021.

Global stocks are seen as adequate to meet 132.2 weeks of consumption in 2019 before falling to 126.5 weeks in 2021, then to 42.6 weeks by 2024, the department said.

(S&P Global Platts)

  • [Editor:王可]

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