increasingly important lithium production may bring future profits to these companies - carbon dioxide absorbent
Lithium is an element with modern industrial use.
The most prominent and fastest growing among them is its use in electric vehicles or combined vehicles (
Electric and gasoline power)for batteries.
It is also used in many other batteries for powering electrical appliances such as mobile phones, cameras, portable computers, etc. Alcoa (NYSE:AA)
Use it to make their latest light lithium
Aluminum Alloy for aerospace industry.
Other uses include: air conditioning, biotechnology, carbon dioxide absorption, additives used as building materials such as cement, to make it stronger and faster to solidify, ceramics, glass, enamel, humidity control, industrial catalyst other than the above mentioned alloy, lubricating oil, aluminum manufacturing, organic synthesis, pharmaceutical, thermal storage, rubber industry, welding and brazing, zero stone, etc.
The following pie chart from USGS gives a general breakthrough in the main use in 2011.
As you can see, the battery is already one of the biggest uses.
However, it is expected that the battery will become an increasingly large piece of cake.
Some estimate that the lithium usage of batteries will grow at a rate of more than 12% per year for at least the next decade, while other uses will grow at a rate of about 3%.
The following figure depicts the signumBOX lithium consumption forecast as of 2025. (
Click zoom in)
According to this forecast, 2012 of lithium consumption is about 130,000 tons, which is expected to increase to more than 400,000 tons by 2025 (
Or more than three times).
However, this estimate may be very inaccurate.
The chart below from Roskill shows the growth in demand in the electric vehicle market as of 2020. (
Click zoom in)
There are two different scenarios. -
The car market has a 5% penetration rate of electric vehicles and a 10% penetration rate of electric vehicles.
About 2 in the case of 5% penetration.
7 million electric vehicles will be sold.
In the case of penetration of 10%, about 4.
9 million electric vehicles will be sold.
A Stanford University study estimated the battery of Nissan Leaf (
About 100 miles)
Use about an average amount of lithium in about 2 cases. 4 kg of lithiumThe Tesla (NASDAQ:TSLA)
More battery use.
Use about 10 KW of lithium every 1 kg.
Tesla Model S (
200 miles away)
The battery is available at 60 KW and 80 KW.
Therefore, the actual usage will depend to a large extent on which manufacturer sells the most electric vehicles;
Or, if someone else develops a remote electric vehicle (as many expect)
This may depend on the battery chosen by most customers.
As you can guess, even the different estimates above are highly variable.
The range of 2020 Nissan Leaf 100 miles may have expanded to 200 miles.
General Motors (NYSE:GM)
There should be a long distance (
200 miles for a single charge)mass market ($30,000)
The electric car quit before 2020. Toyota Motors (NYSE:TM)
An electric vehicle of 600 miles is being developed.
It may be ready by 2020.
I believe other automakers are making similar plans.
This may mean an average of 6-
10 kg lithium will be used for each electric vehicle battery.
This will mean 2. 7 million vehicles (
Penetration rate of 5% EV)
It will take 16 sales in 2020. 2 -
27 million lithium.
If the number of sales is close to 4.
9 million, these cars need 29. 4 -
49 million lithium.
1 kg is equal to one in ten thousand tons (tonne).
In the high-end market, 49,000 tons of lithium batteries may be needed in the electric vehicle market by 2020;
That doesn't even consider things like Toyota's 600-mile electric vehicle.
The car's battery certainly seems to use more lithium than Tesla's.
At the very low end, the electric car market only needs 6,480 tons, although this is highly unlikely.
If you are fully convinced of the TSLA estimates, then the actual numbers are more likely to be close to higher estimates;
Or maybe even more than a higher estimate.
A long-term forecast from the Lithium Exploration Group shows that lithium usage soared after 2020 (See below).
This forecast requires only 500,000 tons of demand for large batteries and 200,000 tons for small batteries;
This doesn't even take into account the lithium demand for anything else.
All of this means that lithium miners/producers may be profitable during this time.
The biggest lithium reserves in the world at the moment are: I believe more reserves will be found over time.
For example, it is difficult to believe the Brazilian figures.
Brazil is a country rich in natural resources,
There is no doubt that huge lithium reserves will eventually be found there.
Or according to the global demand forecast of lithium ore group, battery (
Big and Small)
Demand will reach 700,000 tons per year by 2050.
At present, there are only about 16 world reserves.
9 million tons.
If you don't think
At that time, battery usage will increase to about 300,000 tons (
Get a circle picture)
Then it will take only about 17 years to completely drain the world's lithium reserves at this rate;
However, this does not take into account that most of these reserves may have been used up by 2050.
Somewhere along the way, lithium will become more expensive.
The company that controls it will be a profitable company.
The chart below shows the share of some major companies in world production.
The picture above is from marketoracle. co. uk in 2009. The major non-
The Chinese producers listed for $2009 are: FMC. (NYSE:FMC)
With a 17% market share, quedad Quimica y Minera S in Chile. A. (NYSE:SQM)
With a 29% market share and Chemetall, a subsidiary of Rockwell Holdings(NYSE:ROC)
28% of the market share.
I believe that the market has changed since 2009;
But these big companies are likely to remain leaders.
In the next few years, each family may get a boost from the lithium production business.
Everyone deserves a better look if you are an investor.
Each company is a large diversified company;
But even such companies will benefit from a fast-growing, profitable business that lithium production is expected to achieve in many years to come.
Here is a two-year chart of the three companies: the two-year chart of the FMC is as follows. (
Click zoom in)
This is a particularly strong chart;
FMC may be worth a look for many reasons.
The two-year chart of ROC is as follows. (
Click zoom in)
This is a strong chart that has been consolidated for the whole of 2013.
ROC may store energy for a significant increase in the near future.
The two-year chart for SQM is as follows. (
Click zoom in)
The SQM chart shows a terrible downward trend.
However, SQM is a large fertilizer producer as lithium production increases;
The fertilizer company had a bad year.
Almost all of this has fallen sharply.
When you think SQM is an investment, you will want to do an in-depth study of the fertilizer business.
This article is just a starting point;
I will follow up with an article about the new lithium production company as soon as possible.
The income and income of these countries should be more dependent on the production of lithium.
Therefore, their future performance will depend more directly on the production of lithium.
However, it is always a good idea to give strong consideration to industry leaders;
I tried to introduce them here.
Note: Some of the above basic financial information comes from Yahoo Finance.
Good luck with the deal.
Disclosure: I do not have a position in any of the stocks mentioned, nor do I have a plan to start any position in the next 72 hours.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.