September 18, 2019 / 1:13 AM / a month ago

Solid battery demand to drive Australian lithium recovery by mid-2020

MELBOURNE, Sept 18 (Reuters) - Strong demand from the electric vehicle sector alongside supply cuts should help Australian lithium miners recover towards the middle of next year, earlier than expected, a Benchmark Minerals Intelligence (BMI) top executive said on Wednesday.

Australian producers of spodumene, a type of concentrated lithium ore that accounts for about half of global lithium supply have suffered this year after a flood of production sent prices tumbling by more than 20% this year.

Recently, miners said they do not expect a recovery until the end of this year or early 2020.

BMI Managing Director Simon Moores suggested that the wait could be longer, but still earlier than market consensus of 2021. “There are two factors. One is the build-up of the demand picture downstream. The amount of battery plants that are going up, the amount of contracts that we see being signed long-term. The demand picture is getting even stronger,” he said.

“On the supply side, you have also started to see a response,” Moores added.

Since November last year, BMI has revised up by 50% its estimates for the global build-out of lithium ion battery capacity to 2028.

BMI expects production for next year to come in at 10.7 million electric vehicles, up 35% from 7.9 million this year. By 2028, that will be 36.8 million at more than 2000 gigawatt hours, he added.

Reporting by Melanie Burton, Editing by Sherry Jacob-Phillips

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