Critical battery metal supply meets today's demand: IEA
Supply of critical battery metals such as lithium, nickel and cobalt can "comfortably" meet current demand after major mining and refining investment over the past five years, according to IEA's latest Global EV Outlook 2024.
Global supply of lithium, nickel and cobalt in 2023 exceeded demand by 10pc, 8pc and 6.5pc, respectively, said IEA. Lithium demand for battery rose by 30pc on the year to around 140,000t, that of cobalt increased by 15pc to 150,000t, and nickel rose by 30pc to 370,000t. Continued rapid growth in mining and refining is needed to meet future demand and avoid supply chain bottlenecks, but battery technology advancements can potentially mitigate the demand, IEA said.
IEA noted overcapacity has brought critical minerals prices and battery costs down but is also squeezing mining firms' cash flows and margins, with many companies struggling to stay afloat.
Australia's nickel industry has been hit hard this year, with multiple producers ceasing operations following a sharp nickel market downturn, having to compete with rising nickel supply from Indonesia. Western Australia had to resort to providing royalty rebates to struggling nickel producers.
Low lithium prices are threatening the survival of greenfield lithium project developers, and also affecting some established participants. Major Chinese lithium producer Tianqi Lithium on 23 April issued a profit warning to its shareholders, citing a significant fall in lithium product sales price. Tianqi warned of a net loss of 3.6bn-4.3bn yuan ($497-593mn) in January-March, drastically below a net profit of 4.88bn yuan for the same period a year earlier. Global lithium firm Arcadium Lithium earlier this year warned that current market prices will weigh on future supply.
Cobalt prices in China are also under pressure, with market participants forecasting the downtrend to continue at least until the end of this year.
"Everyone's mentally prepared that this year's a tough year, even 2025 [can be tough]," said a lithium market participant, noting the adverse effects from this year's global economic downturn.
Battery
EV battery demand rose by 40pc on the year to 750GWh in 2023, but at a lower rate as EV demand growth also slows down.
Among major markets, US and Europe grew the fastest by 40pc on the year, while China — the largest market — grew by 35pc. Battery demand in the rest of the world grew by 70pc, but was still lower than 100GWh. China's battery demand reached 415GWh in 2023, while Europe and US trailed behind at 185GWh and 100GWh, respectively.
Battery output in Europe and US were 110GWh and 70GWh, respectively. Lithium-ion battery output in China was 940GWh in 2023, according to data from the country's Ministry of Industry and Information Technology (MIIT). China is leading the way, but it comes at the cost of "high levels of overcapacity", IEA noted. China used less than 40pc of its maximum cell output, with its installed manufacturing capacity of cathode active material and anode active material at almost four and nine times greater than global EV cell demand in 2023.
Homegrown current and additional EV battery manufacturing capacity in Europe and US are scarce. South Korean firms account for over 350GWh of manufacturing capacity outside of South Korea, with around 75pc of existing manufacturing capacity in Europe owned by South Korean firms. Japanese and Chinese firms have 57GWh and 30GWh of capacity, respectively, outside of their own countries.
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Australia’s Origin to expand Eraring battery project
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Bangladesh scrap activity slowly resumes after curfews
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