TRU Supply-demand forecast lithium 2020
IM Lithium Supply & Markets conference 2013 + AnnouncementsLithium Supply Producers Competition Lithium Markets Trends Outlook - Lithium Prices NI 43-101 Lithium Experts Li Companies
TRU lithium 2020 outlook robust
– Dreamliner battery overheating a wider challenge?
TRU Group Inc, release summary January 21, 2013 - Lithium consultants TRU says that its lithium supply-demand outlook through 2020 is proving exceptionally robust. No fundamental modification to our January 2011 forecast is required. However, risk in the outlook has been heightened by the grounding of the Boeing 787 Dreamliner – an aircraft that uses li-ion batteries and lithium metal alloy. Battery and alloy use are drivers of market growth. TRU president Edward Anderson says “the cause of the battery overheating is unclear but there may be lessons to be learned on the wider commercial readiness of lithium battery system technology”. Lithium prices have developed as earlier predicted averaging US$4,400 per t Li-carbonate in 2012 only slightly higher than the previous year. TRU president Edward Anderson says “this price level could be the new norm for lithium carbonate: In addition the price premium on battery over technical grade will soon disappear.”
TRU advises that the Kunasz paper recommending vital required fundamental amendments to the CIM Lithium NI 43-101 Best Practice Guideline is uploaded for the IM Lithium Supply & Markets Conference Jan 29, 2013 Las Vegas NV USA.
Download PDF Version of Kunasz Paper II Download full TRU release
Considered Robust and Valid - IM Lithium Supply & Markets January 2013
The TRU Lithium Supply-Demand Forecast 2020 was first presented January 2009 at an IM Conference in Santiago Chile. The original forecast based on TRU's own data and assessment was for Mitsubishi Corporation and since has required only minor modification: The projections and conclusions for the underlying forecast have proved extremely robust. For example, the lithium carbonate price projection made five years ago has proved accurate to ±10% through January 2013.
TRU assists companies from exploration, through process engineering to lithium product design. For example, TRU technically assessed, chemically modeled and ranked 170 lithium salt lake salars and the 30 pipeline mineral-based projects being promoted globally. In mid 2010 TRU is engaged in several brine, mineral based and oilfield brine feasibility / amenability studies. In 2011-2012 TRU completed several feasibility studies for some of the most challenging lithium developments. The firm also undertook a comprehensive assessment of the plant-by-plant profitability of the big-3 lithium producers – all basic, intermediate and derivative lithium operations. TRU president Edward R Anderson says "The barrier to development for most projects is inadequate lithium expertise. Lithium process engineering \ geology is highly specialized and too many start-ups or juniors have no experience in chemical plant project development. Missteps and some engineering failures are inevitable. Misleading lithium investor documents approved by (wrongfully described) "Qualified Persons" abound. Other new projects will prove unprofitable because their promoters underplay the competitiveness of the industry. Success of a lithium resource development requires solid state-of-the-art technology and the industry strategic smarts to compete".
TRU Group Inc - IM Lithium Supply & Markets
Caesars Palace January 29-31, 2013 Las Vegas, NV, USA
TRU's Ihor Kunasz Ph.D (Geololg) is not presenting but is at the conference
BRINES RESOURCES AND RESERVES - Analysis of and Practical Recommendations for CIM’s Publication “Best Practices for Resource and Reserve Estimation for Lithium Brines” Download PDF Version of Kunasz Paper
Older TRU Press Releases:
New CIM NI 43-101 lithium reserve estimation guideline falls short -
TRU Group Inc, Tucson AZ and Toronto ON November 26, 2012 - Lithium consultants TRU Group Inc says that the “Best Practice Guidelines” for Lithium Brine reserve estimation are deficient and could lead to substantial overestimation of lithium resources, if applied. The guidelines recommend a manner for estimating brine resources and reserves that would include both potential brine producing aquifers with extractable lithium along with associated low permeability sediments, which may contain brine that is not extractable by economic means. Such sediments should be excluded from any resource estimate. The “CIM Best Practice Guidelines for Resource and Reserve Estimation for Lithium Brines” was published November 1, 2012. The CIM guideline applies to NI 43-101 reporting on lithium projects. Ihor Kunasz Ph.D (Geology) is well known as the geologist who developed the original reserve model for the very first lithium brine deposit at Silver Peak, NV and defined the lithium resources for the Salar de Atacama deposit from whence sixty per cent of the world’s lithium is currently produced. He developed the original resource & production feasibility study for the Chemetall-SCL-CORFO (Chilean Development Corp) JV. Download TRU press statement
Lithium Demand Recovers but Lithium Prices Stagnate year-end 2011
TRU Group Inc, Toronto ON, Tucson AZ, January 17, 2012 - Lithium consultants TRU Group Inc says its lithium price forecast 2011 has been affirmed. On reviewing price trends TRU found that prices stagnated 2011 despite reasonable growth in global demand for lithium chemicals. In its January 2011 presentation president Edward R Anderson had said "Lithium carbonate prices came down to below $4500 per t in 2010 and in our forecast will remain around this level for some time". In fact the new data shows that the average price of lithium carbonate for 2011 was unchanged over 2010 at US$4,300 t and there was little sign of upward pressure entering 2012. Download full press statement
Basic lithium chemical prices are being kept in check mainly by over-supply – a situation which TRU says will be exacerbated through 2020 as a number of new pipeline projects come on stream and the existing dominating low cost South American producers SQM, FMC and Rockwood (Chemetall-SCL) expand. Mr Anderson said: "It is pretty difficult for any producer, large or small, to increase prices in the current or projected environment. Customers are clearly resisting price increases now and will likely continue to do so. Those producers attempting to raise prices risk losing customers to competitors". Now in January 2012 there is stronger evidence than ever that the lithium industry will experience stable prices long term.
"Lithium Pipeline Projects cannot beat the Existing Lithium Chemical Big Three"
TRU Group Inc, Tucson and Toronto January 17, 2011 -"Lithium Pipeline Projects cannot beat the Existing Lithium Chemical Big Three." Lithium consultants TRU Group Inc says that its updated lithium supply-demand forecast 2020 slideshow has been uploaded to its website trugroup.com. The outlook is shocking. The seemingly unstoppable supply growth will cause such huge overcapacity that the stability of the industry will be threatened. Pipeline projects and expansions could increase capacity by about 40,000 tpy Li-contained in the next decade – double what the industry needs. Existing lithium chemical producers have the in-ground resources and ability to meet nearly all market requirements by expanding capacity. On the lithium chemicals demand side there has been some recovery in 2010 from recent dramatic declines. Demand and prices will continue weak this year. TRU president Edward R Anderson will tell the IM Toronto 3rd Lithium Supply & Markets conference: "Lithium carbonate prices fell precipitately to $4500 per t in 2010 and will remain depressed. Long term there is no market-driven upward-price pressure so prices will remain stable and likely below $5000 per t". Lower prices and fierce competition through 2020 is bad news for the lithium new project promoters who will find it impossible to compete against the distinctive natural cost advantage of brine-based producers Chemetall-SCL, FMC and SQM. "Only a select few new projects could make it into profitable production and then only as marginal suppliers. Bottom line is if you do have a good resource make sure you also have the strongest possible lithium technical capability to develop it".
TRU's veteran lithium geologist Dr Ihor I. Kunasz, Ph.D (Geol), P.Geol., is also presenting. He will explain the technical reasons as to why existing producers have a natural advantage. Ihor Kunasz says: "It's simple, the existing players have three times the lithium concentration and also reserves that dwarf any of the new players. In addition SQM by far the world's largest lithium supplier has for many years re-injected excess lithium produced into the Salar de Atacama adding to the lithium resource of the salar". Kunasz is well known as the geologist who developed the original reserve model at Atacama from whence 60% of the world's lithium is currently produced. He signed the original feasibility study for development of Salar Atacama Intimately involved in negotiating the feasibility document with Chilean governmental agencies.
TRU Group Inc, November 5, 2010 – TRU is to present a Lithium Industry Market Balance Update and Technical Paper at Toronto 2011 Conference. "Shocking Future Battering the Lithium Industry through 2020". Lithium consultants TRU Group Inc says that its updated lithium outlook for presentation for the IM Lithium Supply & Markets Conference Toronto 2011 will confirm that the industry suffered severely in the 2009-2010 recession with global demand falling in double-digit percentage terms, pushing prices lower too. Little in the long term, including new use from electric vehicles batteries, will counter the overall lower lithium chemical demand that is now expected. New production capacity coming on stream in the next five years plus advanced pipeline projects that will start-up later will exacerbate imbalance and threaten the stability of the industry. The combined structural effect of a downward shift in demand and idle excess capacity will be felt long term. "Competition through 2020 will be increasingly fierce making it virtually impossible for aspiring lithium businesses to ever turn a profit. Millions of dollars invested in these companies will be lost by unsuspecting investors" said TRU president Edward R Anderson. "Most troubling is that the stock market regulators in the United States and Canada have failed to take appropriate action to protect investors from predictable losses. The widespread misuse of the 43-101 reporting system and the authorship of these reports by so called "Qualified Persons" who are far from it, is worrisome!
TRU's Dr Ihor I. Kunasz will be explaining some of the technical reasons for the industry's general naïveté. He is well known as the geologist who developed the reserve model at Salar de Atacama from whence sixty per cent of the world's lithium is currently produced. He also did this assessment for Silver Peak, NV and analyzed most of the competitive brine deposits in the world as Chief Geologist for Foote Mineral Company (now Metallic Foote Corporation). Since joining TRU he has reviewed the resources of most salars in the world that are of any merit. The title of his presentation will be "Lithium Brines – Extraction Technology vs. Pegmatite Mining"
TRU Group Inc, November 9, 2009 - Lithium chemical demand has been hit hard through third quarter 2009 and we envisage a full year decline exceeding 12% over 2008 and weakening lithium chemical prices. Lithium consultants TRU Group Inc says that there is no need therefore to update its well publicized January 2009 long range lithium outlook 2020 presented at the IM lithium conference. The next six months will be critical but a recovery is likely soon. The TRU distinctive forecast of lithium use in electric vehicles and lithium use in alloy is also proving correct. The TRU view that global lithium oversupply will persist at minimum through 2013 is affirmed. Output of lithium chemicals through expansion by existing brine-based producers - SQM, FMC, Chemetall and CITIC – and new development projects in the pipeline will assure sufficient lithium supply long range. Additional new medium range production will originate from mineral-based producers in China particularly and likely the Rincon Lithium (salar) of Argentina. We expect at least one new competitive brine producer to be in production within ten years.
Lithium Chemicals Price Trend: Dominating lithium producer SQM in September 2009 announced 20% price reductions. Lithium prices have been stagnant through 2009: Given market conditions falling prices were expected but they were superficially bolstered by the steep fall in the US dollar against lithium producer and user currencies. TRU president Edward R Anderson says "the SQM price reduction was a necessary correction and consistent with the TRU lithium over-supply scenario. Indeed, there is little prospect for price volatility even long range. Prevailing lithium carbonate contract transaction prices are much lower than stated by most new project promoters and several (misinformed) analysts. Any new producer must be prepared to meet these lower large volume prices. TRU projects an orderly and balanced development of the lithium industry through the 2020 horizon and this translates to price stability."
TRU Group Inc, January 22, 2009 - Lithium consultants TRU Group Inc says that its updated lithium outlook for presentation Tuesday at the IM Lithium Supply & Markets Conference Santiago 2009 will conclude that the industry is not immune from the global recession and will be pushed into oversupply this year through 2013. Global use of lithium will decline sharply by at least 6% in 2009 and demand is unlikely to bounce back any time soon as consumers put off buying laptops or cell phones containing lithium batteries. This is bad news for an industry accustomed to strong sustained growth over many years. TRU president Edward Anderson commented that "an outlook presentation of this type is very unusual for us because all of our work is client confidential. However, Mitsubishi Corporation who commissioned the original analysis has authorized TRU to release some of the material". The techno-economic analysis and supply-demand forecast is a major in-depth assignment conducted by the TRU Lithium Team made up of the world's top technical experts on lithium production and extraction on the supply side, as well as our specialized industry analysts on the demand side. Impacts of recent advances in lithium extraction technology (for example, in selective ion adsorption, electro dialysis, and filtration) are considered.
It is likely now that some expansions and new projects will be delayed or canceled until market conditions improve. The long range however remains bright because new and large uses for lithium will start having a major impact on demand within the five year horizon: Lithium use in electric vehicle batteries and lithium alloys for aircraft. TRU forecasts that demand will be strong and sustained in these two segments over the long term 2020. The industry does need at least one of the announced pipeline production projects to come into production and also could do with another new project as the market tightens around 2015-2017. New lithium producers still will need to be cost competitive with existing salt lake brine based producers in South America and China. Emerging technology may make some of the undeveloped medium sized (brine) lithium resources quite attractive. Certainly the industry through expansion and development of new resources will have no problem meeting demand.
TRU Group Inc based in Toronto, Canada and Tucson, USA are industrial management and engineering consultants with a strong capability in lithium project development. The firm is a world leader in resource evaluation, salar exploitation, brine & mineral lithium extraction and processing technologies - those in use, prospective, and leading edge. TRU Lithium Team has evaluated and modeled most of the known existing lithium properties and advised a number of players on a wide variety of lithium resource, engineering, process, business and investment issues.