With the acceleration of the development of new energy, photovoltaics and new energy vehicles have taken the lead in the past two years. With the development of new energy, soda ash has also become a star variety. Photovoltaic glass required for photovoltaic installed components is the main increase in demand for soda ash this year.
The surge in the production and sales of new energy vehicles is the development of power batteries. The raw material lithium carbonate has become the main source of incremental demand for light alkali, but due to the long-term development of the lithium battery industry, the impact of lithium carbonate on the demand side of soda ash is slowly emerging.
Lithium carbonate industry chain
From the perspective of resource distribution, lithium resources exist in salt lake brine in the form of ions and in rocks in the form of compounds. Lithium resources in salt lake brine account for more than 65% of the world’s lithium resources.
The world’s proven lithium resource reserves are about 21 million tons of lithium metal equivalent, mainly concentrated in Chile, Australia, Argentina and China. The mineable lithium reserves in the four countries account for 80%. China’s mineable reserves of lithium resources are 1.5 million tons, accounting for about 7% of the world’s total mineable reserves.
Lithium carbonate is the basic material for the production of secondary lithium salts and lithium metal products, so it has become the most used lithium product in the lithium industry, and other lithium products are basically downstream products of lithium carbonate. From the perspective of application fields, lithium carbonate can be widely used in industries such as batteries, ceramics, glass, lubricants, and optoelectronics.
With the continuous development of consumer electronics such as mobile phones and new energy vehicles, the battery industry has become the largest consumer of lithium carbonate. Due to the vigorous promotion of new energy vehicles in Europe, America, Japan and South Korea, new energy vehicles account for more than 50% of the downstream applications of lithium carbonate in the world.
The relationship between lithium carbonate and soda ash
The production process of lithium carbonate can be divided into salt lake brine extraction and ore extraction. Foreign countries mainly use salt lake brine, and China mainly uses solid ore extraction. Due to the limitations of technology and resources, the development speed of lithium extraction from salt lakes in China is relatively slow.
The process of extracting lithium from ore is based on spodumene, lepidolite, etc., using lime sintering method and sulfuric acid method, among which sulfuric acid method is the main method at present.
The salt lake lithium extraction process is based on lithium-containing salt lake brine as raw material, using precipitation methods (carbonate precipitation method, aluminate precipitation method, boron-magnesium and boron-lithium co-precipitation method), calcination leaching method and other two processes in the preparation process.
Lithium ions in the solution need to be precipitated by adding excess soda ash. In theory, 1.8-2 tons of soda ash is consumed to produce 1 ton of lithium carbonate (mainly light alkali is used).
Situation of lithium carbonate industry
Capacity utilization rate of China is low
At present, China’s lithium carbonate production capacity utilization rate is low, and China’s production capacity utilization rate will only be 52% in 2021. On the one hand, more than 80% of China’s lithium resources are salt lake lithium.
The magnesium content in salt lakes is relatively high and is mostly distributed in western regions (Qinghai and The amount of lithium resources in the Tibet Salt Lake is 3.1004 million tons and 2.223 million tons), and the natural environment is relatively harsh and difficult to mine.
On the other hand, currently 80% of China’s lithium products come from ore extraction, and China’s limited output of raw material ores mainly relies on imported ores from Australia. As a result, some lithium salt enterprises in China only have production capacity, but no corresponding mines or salt lake resources.
In recent years, China’s total lithium carbonate output has increased significantly. In 2016, China’s lithium carbonate output was 66,000 tons. By the end of 2021, China’s lithium carbonate output will reach about 230,000 tons, a year-on-year increase of 32.6%.
Due to the strong downstream demand in recent years, China’s lithium carbonate is limited by resources and production processes, and the output growth cannot keep up with the demand growth, resulting in tight supply and demand and rising prices.
Although China’s lithium carbonate industry has been increasing its supply in recent years, most of the production capacity projects are still under construction. It is expected that the annual production capacity of lithium carbonate will reach 680,000 tons in the next two years.
Demand for lithium carbonate continues to increase
China is the world’s largest lithium consumer, accounting for about 55% of the world’s lithium consumption. From 2016 to 2021, the apparent consumption of lithium carbonate in China has been increasing year by year, with an annual growth rate of more than 20%.
Although China’s lithium carbonate production is growing rapidly, China’s self-produced lithium carbonate cannot fully meet the rapid growth of demand, so imports are still needed to meet demand. In recent years, China’s lithium carbonate imports have also shown an increasing trend year by year. In 2021, China will have 81,000 tons of lithium carbonate to supplement China’s demand through imports.
The development of new energy and demand for lithium carbonate
The demand for lithium carbonate in traditional industries is mainly concentrated in the manufacture of ceramics, glass, lubricants, etc., and the demand is relatively stable. It has become the core of driving the growth of consumption in China’s lithium carbonate market, and lithium carbonate has thus become the biggest bright spot in the downstream of light alkali. And here is a latest ranking of top 5 lithium carbonate factories in China for you to know about this industry.
In 2021, China’s new energy vehicle production will be 3.545 million units, a year-on-year increase of 159%. A total of 3.521 million vehicles were sold throughout the year, with a market penetration rate of 13.4%, a year-on-year increase of 1.6 times. Sales of new energy vehicles in Q1 in 2022 were 1.257 million vehicles, a year-on-year increase of 1.4 times, and a market share of 19.3%.
It is estimated that the sales volume in 2022 is expected to exceed the 5 million mark, and the penetration rate will exceed 20%. The rapid development of new energy vehicles in the future will increase the demand for power batteries, which in turn will increase the demand for lithium carbonate.
Calculation of demand for soda ash
In 2021, China’s lithium carbonate demand will total 330,000 tons, lithium carbonate production will be about 229,000 tons, and the recycling sector will extract about 22,000 tons of lithium. Due to the increase in demand, the production capacity is also expanding.
It is estimated that in 2022, with some new production capacity in China put into production, the supply of lithium carbonate in China will exceed 280,000 tons, and the output of recovered lithium may increase to 33,000 tons, theoretically producing 1 ton of carbonate lithium needs 1.8 tons of soda ash (considering the loss is calculated as 2 tons).
Due to the development of new energy vehicles, power batteries are the main demand increase in the future. Theoretically, the lithium carbonate required for a battery with a capacity of 1KWh ranges from 0.45-0.68kg, including nickel-cobalt lithium aluminate (NCA) and nickel-cobalt lithium manganese oxide. (NCM) and lithium cobaltate (LCO) have similar molecular weights, and the unit consumption of lithium carbonate is about 0.65kg.
Based on the consumption of 0.65kg of lithium carbonate per 1KWh capacity battery, 230GWh batteries in 2021 will require about 149,500 tons of lithium carbonate.
It is estimated that in 2025, China will have a demand for power batteries of 450GWh, and the output of power battery grade lithium carbonate will increase to about 300,000 tons. China’s lithium resource storage can meet the demand, but the development of lithium extraction technology from salt lakes is needed in the future. And our lithium extraction manufacturers article will demonstrate the outstanding companies of it.
The increase in demand for lithium carbonate in the industrial sector is relatively stable. Based on an annual demand of about 2%, the demand in the industrial sector will be around 150,000 tons in 2025. In the consumer battery sector, based on the growth rate of traditional electronics and 5g mobile phone demand, it will be 4% calculated around the growth rate, the demand for lithium carbonate in 2025 will be around 65,000 tons.
Energy storage will grow faster in the future, but the overall proportion is not high at present. It is estimated that the demand for lithium carbonate will be around 50,000 tons. The demand for lithium carbonate is 565,000 tons, so the demand for soda ash is about 1.13 million tons (if some lithium carbonate is imported directly, the demand for soda ash in China will decrease)
Photovoltaic and new energy vehicles have been on the rise in the past two years. With the development of new energy, soda ash has also become a star variety. Photovoltaic glass required for photovoltaic installed components is the main source of demand for soda ash this year.
The production and sales of new energy vehicles are large. The increase will lead to the development of power batteries, and the increase in demand for raw material lithium carbonate will become the main source of incremental demand for light alkali.
However, due to the particularity of the development of the lithium battery industry, lithium carbonate will have a long-term impact on the demand side of soda ash. The effect on soda ash may not be as good as photovoltaic glass, and the impact of lithium carbonate on soda ash in the medium and long term cannot be ignored.