Rapid increase in the price of battery materials due to the dedication of electric vehicles

According to foreign media reports, as a large number of car companies vigorously promote electric vehicles, a new round of battle for battery materials has intensified. Electric car batteries rely on a large number of raw materials, such as: lithium, nickel, cobalt and graphite, some vehicles even use rare earth resources.

Last year, the price of battery materials soared. In the past year and a half, the price of raw materials for cobalt mines in the Democratic Republic of the Congo has increased by more than 190%.

Car manufacturers and battery makers are signing agreements with major mining companies. With the growth in the number of electric vehicles and the relaxation of government policies in various countries, future vehicles will shift from diesel locomotives to electric vehicles. The demand for various types of battery metals will undoubtedly increase.

According to the International Energy Agency, the number of electric vehicles traveling on the road in 2016 reached 2 million, and it is estimated that the number of electric vehicles on the road will reach 40 million by 2040. Some major international miners are implementing business transformation to supply the lithium-ion battery market. BHP Billiton stated that 2017 will be a "tipping point" for the development of electric vehicles.

In September of this year, China Great Wall Motors signed an agreement with the Australian miner Pilbara Minerals to ensure lithium supply for the next five years.

Financial speculators also joined the movement. Cobalt27 has accumulated more than 2,000 tons of cobalt, and Chinese hedge fund (Shanghai Chaos) has also accumulated a large amount of cobalt.

Insufficient supply of cobalt and great price changes have become a major problem for car manufacturers and battery manufacturers. Currently 65% ​​of cobalt comes from the Democratic Republic of the Congo, which is one of the poorest countries in the world. UBS analysts believe that demand for cobalt will double in 2020 to nearly 200,000 tons per year. For this reason, there is a need for an expansion of mining projects to avoid the dilemma of falling into material shortages for a long time to come.

Although lithium ore resources are more abundant, supply shortages are still faced in the next few years as new mining projects are still unable to meet supply requirements. According to Goldman Sachs, the demand for lithium is expected to be more than four times current by 2025, when it will reach 779,000 tons. However, the promotion of new mining projects and the realization of mass production are facing obstacles.

At present, lithium metal is mainly purified from hard rock in Australia and brines in the South American desert. If you want to develop new mining projects, you can only look at Argentina. Although Bolivia also has a large amount of lithium reserves, there is a higher magnesium precipitate. Because impurities affect quality, lithium mines in Bolivia are not suitable.

However, the commodity futures market also faces a core uncertainty: the future of battery technology. Due to the high price and high degree of uncertainty, battery manufacturers are reducing the amount of cobalt used in batteries. In September of this year, Johnson Matthey, a UK sustainable technology company, announced that it has developed a new high-performance battery material that uses both lithium and nickel but reduces cobalt. The amount of use. According to the investment bank LiberumCapital, nickel contributes to boosting the battery's electricity consumption, which is 1/6 of that of cobalt and 20 times that of cobalt. It is estimated that the demand for battery grade nickel in 2025 will increase from 75,000 tons last year to 400,000 tons (depending on the specific composition and content of each material).

In the long run, battery companies are looking to refurbish battery designs. Dyson in the United Kingdom is also planning to enter the market with you in 2020. Its models will use solid-state batteries and will launch their new models as quickly as the end of 2020. This type of battery uses a more secure solid-state material to replace the electrolyte commonly used in current batteries.

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