Hi
@TünnesThanks for your great effort to convert these predictions fun to a little bit of scientific job. It's good. It actually shows the expectations of holders here. And demoralizes the shorters.
Here are my predictions then;
December 31, 2023: $4.20
June 30, 2024: $ 6.20
December 31, 2024: $8.50
Let's have a look at the facts now.
The lithium price will climb dramatically at the end of this year according to my calculations.
I think the spod rice in stock market will be over $6000 at the end of this year. THE FORECASTS ARE GOING TO BE WORNG AGAIN.
(FOR EV SALES GROWTH RATE AND PRODUCTION GROWTH RATE) (Imo of course)
Yes, I think the lithium price will climb dramatically according to my calculations, over $6000 at the end of this year.
It's because the supply/demand deficit will be widening due "unexpectedly" HIGH grow rate of EV sales for this year and "unexpectedly" LOW growth rate of production.
And that implies to HIGH LITHIUM PRICES.What is unexpected in growth rate of EV sales?
We need to work with the numbers. Then we can easily see what's going to happen as we always do.
The global EV sales was (BEV+PHEV) was 10,500,000 in 2022.
60% of that was in China.
The general consensus by the forecasters for 2023 EV sales was this;
They told that the growth rate in 2023 would be around 35%.
That was 14.1m EVs. And the forecasters were saying that 35% growth rate would balance the supply/demand deficit and there wouldn't be a deficit in 2023 hence the lower lithium prices.
Really?
I was thinking the opposite.
Here is the forecast table made by BNEF (Bloomberg New Energy Finance below. The purple markings are mine, to show you the years and numbers clearly. You can see 2022 realised sales 10.5m and forecast for 2023 is around 14m.
They thought that the HALT of EV concessions by the Chinese gov. by the start of 2023 would affect the EV sales negatively, and because China is biggest EV sales market then the global growth rate would be much lower than 2021-2022.
35% was the consensus of forecasters.
An the "smart" Chinese lithium buyers (converters, refineries, cathode makers, etc) wanted to manipulate the market by this opportunity for getting the prices down. They simply didn't buy from the spot market, used their stocks (destocking) and spot prices declined. Actually the spot market was representing only the 10% of whole lithium sales as the main lithium trade is being done through the offtake agreements.
I was watching all these with great fun, but watching the EV sales very carefully.
EV sales are everything for us guys. Just watch them but nothing else if you don't want to be bothered with a lot of news and analysis. If the EV sales are going up, the demand is the lithium prices will go upGLOBAL EV SALES WILL BE OVER 15M IN 2023
ACCORDING TO JAN-MAY SALE STATISTICS (CHINA) (already realised)CHINA EV SALES FOR JAN-MAY SHOWS A HUGE GROWTH RATE IS HAPPENING.
It's 48% for Jan-May 2023 sales.
The GLOBAL growth rate must be at least 45% for 2023 according to this data, but not 35% as forecasted, Now we will look at the Jan-May EV sale in China and try to calculate the EV sales growth rate for the rest of the year 2023. Then we will consider the effect of IRA (Inflation Reduction Act) in US EV sales which drives the sale crazy in the US atm.
Now let's have a look at the realised numbers of EV sales in China for Jan-May (5 months).
We should know this first that the the EV sales at the first half of every year is much lower than the second half of the year (nearly 1/3rd).
China sold 2.94 million EVs in January-May,
up 46.8 percent year-on-year,
with a market share of 27.7 percent.
Source: "China NEV sales up 12.74% MoM to 717,000 in May, CAAM data show"You can see on the table above that Jan.2023 sales was even less than Jan.2022 sales. That was a bad sign. Then In Feb. the Chinese gov. put the EV concessions back in place. Then the Feb sales has been much better than Feb.2022 sales. March was that good though But April has come out good again. Now May looks much better than May-2022.
What I was watching was the growth rate..!
If China could catch over 50% rate, then it would push the global growth rate over 45%.And that 10% more growth rate would make big difference.
Here is why...
1M MORE EV IN 2023 SALES WILL CREATE A SERIOUS DEFICIT IN LCE SUPPLY/DEMAND BALANCE.10% growth rate in EV sales was going to be 1,050,000 EVs as 10.5m EV was sold in 2022.
(now these calculations are also will be helpful for
@Goldilocks to make his calculations again)
In 2022, the world used around 750kt of LCE. (This number is not certain as there is no healthy source to obtain it).
We assume 80% of that LCE was used in EVs.
That makes 600kt LCE for EV usage in 2022.
That means 57kg of LCE used in every EV.
For 1KWh battery the LCE usage is 0.9kg. (
@Scarpa is right there).
Let's say average battery kWh for an EV is round 65kW(Not 100Kw like Tesla S). (There is also PHEVs in this calculation and they use smaller batteries. But we have to take the ave. numbers).
When we calculate the total LCE usage increase from 2022 to 2023 for a growth rate of 45% then we should do the same for LCE demand and supply rate
If the demand was 750kt in 2022, and 80% of it for EVs then let's get that part increased only.
(We are not including the energy storage systems -ESS demand here although it's market is expanding as much as EV market now, maybe even more. This is another important topic to be researched and discussed)
It was 600kt LCE in 2022.
600kt LCE x 45% = 270kt LCE
That means the lithium supply needs to be increased at least 270kt LCE in 2023 in order to meet the demand.I can't see where that much LCE supply will come from.
If we say half of it from spod concentrate from hard rock mines in Australia, then let's see how much spod conc. that makes
250kt / 2 = 125kt LCE
For making 125kt LCE you need to multiply it with 7.5.
(1t of LCE can be produced from 7.5t of spod)
125kt x 7.5 = 937kt spod concentrate is neededNow who is going to make expansions to produce to 937kt spod concentrate in Australia?
We know all the mines.
I don't know any mine which makes that much expansion in Australia.
There is only;
- Greenbushes (Already expanded but trying to for more, not ready for this year)
- Pilbara Minerals, (expandind but not hat much)
- Mt Marion (MIN/Ganfeng), (was expanding but cut some of it due to high costs)
- Wodgina (ALB/MIN) Just started production last year, slowly ramping up.
- WES/SQM is not operation yet.
- CXO is too small.
- Mt Cattlin is nearly dead
We all know those miners are also under pressure of high costs. Also the availability (lead time) of new process machinery is very long. (it's 2.5 years min for a SAG mill, more than a year for a primary crusher for example).
Here is the answer below from the company which was shorting LTR.
See what Morgan Stanley says below.Can you see the deficit now?
(20min delay)