Sao Paulo — Global lithium demand should grow at least 20% in 2019 compared with 2018, driven by batteries for electric vehicles, Chilean producer SQM said in its annual report.
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According to SQM, the demand for lithium chemicals increased around 27% year on year in 2018, reaching about 269,000 mt.
"We expect applications related to energy storage to continue driving demand in the coming years," said the company.
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"We believe that full electric vehicle penetration rates reached 2% in 2018, and this number is expected to over double in the next five years," added the company, which currently has an installed capacity of 70,000 mt/year of lithium carbonate and 13,500 mt/year of lithium hydroxide.
SQM estimated that batteries currently account for 65% of total lithium demand, including batteries for electric vehicles, which account for about 36%.
Despite the potential for an increase in demand, the Chilean producer believes lithium prices may be pressured this year due to new supply entering the market.
"However, there are several lithium grades of different qualities available in the lithium market, and not all products are sold at the same price," it said, adding that "we do not believe that all lithium supply entering the market is suitable for all customers" and that SQM will focus on providing high-grade product.
SQM reported shipments of 45,100 mt of lithium carbonate equivalent in 2018, and net sales of $734.8 million, leaving the average price at $16,292/mt, 25.6% higher than in 2017.
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