Japanese Chemical Trader blog

Japan Chemical Trading Blog


Recently in Japan, while shares have been rising due to the effects of the monetary easing measures of the Bank of Japan, the actual economy seems to still be struggling.
Throughout the world, the prices of many base metals and minor metals, which we handle, have been dropping as well, perhaps owing to the effects of the economic slump in Europe and China.
Nevertheless, the price of lithium (lithium carbonate) has been rising.
Needless to say, lithium’s usage in lithium-ion batteries is focused upon; the demand for lithium-ion batteries is about 14,000 tons, against 18,000 tons for the total domestic demand in Japan, showing a high growth rate during these years (estimated figures in 2014).
According to the United States Geological Survey, about 35,000 tons of lithium is produced in the world (Li, 2013); an oligopoly market is shared by three big makers: SQM (Chile) Rockwood Lithium (former Chemetall, Germany) and FMC (U.S.A.), which know the way of impurity separation to use salt water from salt lakes as raw material,.

As we mentioned before, Sumitomo Metal Mining is reinforcing its production facilities of lithium nickelate for positive-electrode material for lithium-ion batteries for Panasonic. The website of Sumitomo Metal Mining reports as follows: they anticipated a further increase of lithium-ion battery demand for the 4-door sedan, “Model S” of Tesla Motors of the U.S., so they invested 4.8 billion Japanese yen (approx. USD 48 million) by the summer in 2014 to increase the production of lithium nickelate from 300 tons to 850 tons a month and they will further increase the production from 850 tons to 1,850 tons a month, at 15 billion Japanese yen (approx. USD 150 million), by the winter of this year.

We are not sure whether or not the demand for Panasonic lithium-ion batteries will increase in the future; however, we are sure that the quantity of lithium Japan imports will increase for the moment.
That’s why we checked the customs clearance statistics of Japan (lithium carbonate) and found out, as we expected, the quantity of lithium Japan imported in 2014 rose to 12,107 tons from 8,215 tons in 2013; a 47% rise.
The unit price in 2014 has increased as well compared to that in 2013 and the unit price in 2015 is still higher (JPY 527 per kg in 2013, JPY 544 per kg in 2014, JPY 617 per kg in 2015).
FMC, U.S., declares on its website that they raised the lithium salts price by 10%, including lithium carbonate, as of December 1. The website also says “The increases are necessary to offset continued rising costs of raw materials and operational cost pressures at our Argentina facility.” We interpret this as international demand is becoming tighter because big consumers such as China, Korea and Japan need it more and more.

In the industry, SQM in Chile is rumored to not be producing enough lithium, therefore, people are feeling uneasy.
There are some factors to ease the supply and demand balance; a new lithium carbonate project in Salar de Olaroz, Argentina, which Toyota Tsusho Corp., Japan, has been developing since 2010.
The website of the company says it will start full-scale production of lithium in late 2014; 17,500 tons a year, in the initial plan.
It seems there is no detailed publicity of the current status of the project as of now; 17,500 tons can cope with the domestic demand of Japan, so that its actual shipment may become one of the factors to ease the supply and demand balance.
Those subscribers who are in the lithium salts business should watch the Toyota Tsusho project.