Benchmark Intelligence Lithium Research, page-37

@SF@HC .........."It's pent up demand that the converter is unable to take advantage of, missed opportunity to feed downstream righ now, but will hold up dowstream until they are ready,"

We are going to have to agree to disagree on this one, as I just don't see your point at all. It does not make any economic sense to me.

If the bottleneck was with the converters and not the cell makers, then the cell makers (battery manufacturers), IMHO would be bidding against each other to get what little supply of lithium chemicals they could, too keep their lines running at close to 100% of capacity a possible.

If one of the cell makers cut back production because of not enough raw materials in one category then they would not just sit back and take it on the chin and let their competition still run at 100%, they would bid up the price of whatever was in short supply. That is simple economics 101.

In such a situation if Li2CO3 and LiOH were in short supply the price would be rising, not falling as it currently is. Just as the contract price for spodumene, hydroxide and carbonate varies, I'm sure that the converters have price variations built into their contracts with the cell makers, and likewise from cell makers to EV plants, it is just how the world works in business where the raw ingredients are a high percentage of the cost, and vary in price a lot.

My expectation is that as more conversion comes on-line during this year and next, the cost of the lithium chemicals and the converters margins will continue to fall, unless the cell makers growth rate goes up faster than expected.

The cell makers are the expensive part to set up. For example with the MIN/ALB Wodgina plant ALB has estimated the 100,000t/a hydroxide plant will cost about $US1.6B to build. This will create enough lithium hydroxide for about 125Gwh of battery production/a. (using BMI figures of 0.8kg of LCE/Kwh).

125Gwh of battery manufacturing capacity would cost around $US12.5B to build using the rough guide of $US100-120M/Gwh for existing plants of 10Gwh+ in size.

It is very clear to me that the expensive bit to set up, the cell makers, is where the bottleneck lies and will continue to be, especially the time taken. As an example the Tesla Gigafactory in Nevada started to be built in 2014, was officially opened in 2016, but here we are in 2019 with Panasonic only building batteries at a rate of about 24Gwh/a even though the nameplate was 35Gwh. According to a Musk tweet the 35Gwh was a "theoretical capacity'', not the actual capacity.
https://www.teslarati.com/tesla-panasonic-defends-gigafactory-1-partnership/

The growth rate of the EV industry will be as fast as the weakest link in the entire system. IMHO that area is the battery makers and I don't think that the car manufacturers have thought about the weakest link in there plans, but are probably starting to with Tesla, Audi and Hyundai all having problems with battery supply.

No matter which way I look at the future, and let's say the car manufacturers see where the problem is and start building their own battery supply, it won't matter how much money they throw at it, it will take a few years for the build out and the current oversupply of lithium to be resolved.