PLS (ASX) Lithium Carbonate verses Lithium Hydroxide: Supply vs demand

Originally posted by whiffo001: ↑

Please correct me where I am wrong.

Looking closely at the projected demand verses supply triangulation calculations that are currently being run by analysts to predict when demand for Lithium will outstrip supply. The current estimate for this to occur is in 2023 based on currently known figures and then extrapolated out to give demand scooting up past supply at 600 ktpa LCE. What is interesting to note is that supply is flattening out at a time when demand is accelerating upwards in 2023.

I guess the big and far more important question is how accurate is this extrapolation and could the crossover occur for Lithium Hydroxide uch faster than estimated?

Research shows a number of not so obvious facts hidden behind published data that could indicate a much sooner crossover and more importantly for spodumene (hard rock) lithium producers such as PLS and others.

Looking at current battery producer trends and one can see an obvious tendency for Lithium Hydroxide to be preferred over Lithium Carbonate for a number of technical reasons: Higher Energy density, operational efficiency, etc.

It has been reported that demand for Lithium Hydroxide will overtake Lithium Carbonate demand in the near future. It should also be noted that Lithium Brine producers have to undergo two conversion steps (Simplified: Li to Li2CO3 to LiOH) to make Lithium Hydroxide whereby Spodumene producers can convert to Lithium Hydroxide in only one conversion (Simplified: Li to LiOH) step making it more economical. This is one of a series of key important facts to consider.

The preference for Lithium Hydroxide is reflected in the current prices published for each form of Lithium currently traded to supply the battery material converters.

Lithium Carbonate: Li2CO3. 99.5% Battery Grade. 10.5 to 12 $/kg. 18.69% Lithium by Molecular Weight in the product : Lithium content $56.18 to $64.21 per kg of Lithium metal equivalent.

Lithium Hydroxide Monohydrate: LiOH.H2O 56.5% . 14 to 15 $/kg. 16.37 % Lithium by Molecular Weight in the product. Lithium content $85 to $92 per kg of Lithium metal equivalent.

It shows that Battery makers are prepared to pay a premium for Lithium Hydroxide over Lithium Carbonate indicating a strong preference for the Hydroxide form of Lithium. This is confirmed by research published to date.

The next very big question is how much faster is demand for Lithium Hydroxide going to ramp up from left field countries and giga battery power stations, buses, trucks, transport, factory and home battery power storage systems?

The current research shows a projected battery production capacity of 658 GWh in 2023 which is 3X current.

To meet this demand in 2023 we would need the following totals:

Lithium Carbonate Equivalent (LCE): 300 thousand tonnes. or 3X current and,

Lithium Hydroxide Monohydrate: 300 thousand tonnes and growing 2X faster than Carbonate form..

Above: Based on preference for Hydroxide form over Carbonate. To match the projected demand offtake to be 600,000 tonnes. LCE total in 2023.

Current research shows demand for Hydroxide form double that of Carbonate form and outstripping the Carbonate form by 2024.

If you take all of this research into account then I would be looking at the following:

1. Lithium Hydroxide demand is growing 2X faster than the carbonate form.
2. Lithium Hydroxide prices are higher per kg of Lithium than Carbonate prices and have contracted less in the past 2 years.
3. Lithium Hydroxide demand will outstrip Lithium Carbonate form by 2024 or earlier.
4. Lithium Hydroxide requires one less chemical conversion step than Brine derived carbonate form.
5. Lithium demand for the Hydroxide form may be greater than supply earlier than 2023 based on the above.
6. Hard rock Lithium producers have an advantage over Brine producers because of the above factors.
7. Chemical Lithium converters will prefer the Hydroxide form over the Carbonate form based on above.

gltah..

Expand

Thanks for posting this. I will add Li Carbonate is also an environmental impact using excess water to produce Carbonate causing impact on the environment with water issue. Bloomberg had an article on this I think I posted it few months back... hope this help

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