BloombergNEF, the primary research service for Bloomberg, is forecasting an 18% drop in electric vehicle (EV) sales this year due to disruptions to battery metals supply chains from the covid-19 pandemic.<\/p>\n
It has lowered its forecast for EV sales this year to 1.7 million vehicles, a 27% drop from its earlier forecast.<\/p>\n
The decrease in EV sales will result in a 10% drop in demand for lithium-ion batteries to 71-gigawatt hours (GWh).<\/p>\n
However, it expects long-term demand for EVs to be maintained. The group projects global EV sales to reach 26 million vehicles by 2030, 9% below its 2019 forecast of 28 million vehicles, and total lithium-ion battery demand for all end-users is expected to reach 2,000 GWh by 2030.<\/p>\n The decrease in EV sales will result in a 10% drop in demand for lithium-ion batteries to 71-gigawatt hours (GWh)<\/p>\n<\/blockquote>\n<\/figure>\n The lithium market will remain in balance, it says, with deficits for both lithium hydroxide and lithium carbonate, critical ingredients for lithium-ion batteries. Bloomberg predicts that demand for lithium hydroxide will fall into deficit in 2021.<\/p>\n Despite the impact of covid-19, lithium carbonate remains oversupplied, with de-risked capacity reaching 405,000 tonnes of lithium carbonate equivalent in 2020, 12% lower than its 2019 forecast, BloombergNEF reports.<\/p>\n It expects lithium prices to fall during the second and third quarters of 2020 as much as 11% for spodumene, an important lithium-bearing mineral, and a vital source of the metal, 5% to 9% for lithium carbonate and 4% to 7% for lithium hydroxide.<\/p>\n Meanwhile, nickel, a key ingredient in lithium-ion batteries, is expected to hold steady and could perform better in 2020 than other base metals, albeit lower than predicted in 2019, BloombergNEF notes.<\/p>\n Prices, it said, should remain around the two-year average of $13,000 per tonne and could recover further in the fourth quarter, with potential for price increases in 2021.<\/p>\n It also expects prices to recover for mined class 1 nickel (which contains a minimum of 99.8% nickel) if it goes into deficit and there is no flexible demand switching.<\/p>\n Furthermore, because nickel refineries are using feedstock inventories to maintain production, the class 1 nickel market is balanced. However, should producers fail to keep up with capacity expansion plans and continue to scale back on capital expenditure, class 1 nickel and nickel sulphate could fall into deficit in 2021, BloombergNEF said.<\/p>\n Cobalt, used as a cathode in lithium-ion batteries, is also expected to fall into deficit in 2020, according to BloombergNEF. Although the deficit is modest at 17,000 tonnes, Bloomberg notes, it could lead to a marginal price increase of 5% to $31,000 per tonne by the end of the year.<\/p>\n Due to a sluggish recovery in the expansion of supply as producers pull back on capital expenditure needed to upgrade capacity, the deficit could be much larger from 2021 to 2023.<\/p>\n\n