BloombergNEF ups battery demand forecast

Battery metals prices have seen a strong recovery in the first half of 2021, and in its H1 Battery Metals Outlook report, which forecasts demand to 2030, BloombergNEF projects markets for key battery metals to remain robust.

Starting with projected total battery demand, the research company noted that its forecast for 2030 demand has risen 35% over the last year. Now, BloombergNEF expects demand to pass 2.7 terrawatt hours per year in 2030, with the rise coming from higher expected demand for passenger EVs.

Going forward, if higher battery metals prices are sustained, the report says it could influence preferred battery chemistries - but not EV adoption overall. Automakers could choose to switch from high-nickel chemistries to lithium iron phosphate (LFP) chemistry, even though it would reduce performance and particularly range of some EVs. However, "this would enable the electrification of transport to continue unabated."

Key highlights

While BNEF predicted at the beginning of the year that a price differential in nickel would emerge in order to incentivize nickel sulphate production, no signs of a "two-tier system" for nickel prices have yet materialized. As a result, nickel prices are likely to hold steady around US$18,000 per tonne for 2021. While some pressure has been taken off of the demand for nickel sulphate as some Chinese automakers have switched to LFP chemistries, BNEF still sees a possible nickel sulphate deficit of 128,000 tonnes as early as 2024.

Lithium carbonate and hydroxide prices have climbed by 71% and 91% respectively this year, with prices expected to rise further then plateau as more supply comes online in 2021-22. Both are well supplied until 2025, but hydroxide could face a shortage by 2027 as demand for high-nickel chemistries rises.

With cobalt prices up 42% year-to-date, BNEF expects prices to hold at about US$44,000 per tonne up to 2025. The firm expects supply to be in surplus for the decade, starting with a small surplus this year.

BloombergNEF Metals demand from lithium-ion batteries. Credit: Bloomberg NEF