Ann: BMX Pre-Auction Bid, page-228

According to Fastmarkets, this and next CY, new nameplate (paper) supply of lithium LCE units will be ~ 170kt and 185kt respectively, but cautioned that not all this expected new capacity will come online smoothly and the new (unqualified) projects in that mix do need time for product qualification, so from my perspective, reasonable to expect only 80% comes to market, therefore, new supply of ~140t and 150kt in 2022 & 2023.

It's also best to consider, most LCE units are not traded on the spot market, therefore average LCE unit prices are probably in the range of $35 to $40kpt, not $75kpt.

Now focusing on the demand side of the equation, 2022 & 2023 demand growth is likely to be 200 and 230kt respectively, which represents an impressive 87% increase (43%pa) over 2021 demand, while the above new supply represent a 59% increase (29% pa) over said period, but the latter will not fill the 2 year gap created through lack of investment and stagnation of the sector in 2019 and 2020 years. It will take more than a few years to fill that gap, no matter how much coin is thrown at new capacity.

Picking on just 2 auto OEM's, BYD & Tesla, they will basically consume a combined 200 and 230kt of LCE (if available) to meet their 2022 and 2023 EV sales projections. Yes, just 2 OEM's consuming ~1/3 of available supply, which perfectly highlights the dilemma for those OEM's who are "wanting" to ramp EV sales next year and beyond.

For example, Ford want to produce 600k F150 Lightning from next year, which the base model has a 132kwh battery pack, and 600k base models would consume 80kt LCE, while BYD has been selling EV busses for years, Tesla want's to scale the Semi and Cybertruck next year, you get the picture.

BMI describe the above as the battery supply chain "raw material disconnect". They are right, and OEM's signing offtakes with non-conventional non-producers will find out the hard way over the next 2 or so years, it won't be pretty.