In the past year, the global lithium market has been characterized by a significant shift in dynamics, with prices falling precipitously. Despite spot prices reaching over $80,000 per ton in December 2022, they sit at just over $13,000 per ton as of Jan. 30, a decline of over 80%. Oversupply and softening demand leading to falling prices for the critical mineral raise concerns about the potential impact on various industries, particularly those reliant on lithium-ion batteries, such as electric vehicles (EVs), renewable energy storage, and consumer electronics.
Lithium, a crucial component in the production of batteries, has been a key element of the advancement of clean energy technology. Along with other critical minerals, including nickel, cobalt, manganese, and graphite, the metal is an essential component in many of today’s clean energy technologies, such as EVs, electricity networks, and wind turbines. In addition, lithium batteries are used in many everyday electronics, from phones, laptops, and tablets to power banks, though at a much smaller level. Over the years, growing government and private sector initiatives to wean dependence off fossil fuels in favor of renewable energy solutions initially led to a spike in lithium prices, creating a robust market for the mineral.
However, several key factors have triggered a shift in the landscape. A “perfect storm” has hit the lithium market, caused by destocking, deceleration in EV demand, and continued supply growth. The sudden deceleration in demand for lithium, particularly in the EV industry, caught suppliers by surprise, and as their stockpiles increased, this surplus placed downward pressure on prices.
The fluctuation in lithium resource prices has a direct impact on the production and application of various lithium-related products. Pressure swing adsorption (PSA) and vacuum pressure swing adsorption (VPSA) oxygen generation technology utilizes adsorbents to selectively adsorb gas components, with lithium-based adsorbent being a crucial role. The decrease in lithium prices directly reduces the raw material costs in the production process, thereby lowering the overall costs of VPSA and PSA oxygen generation equipment. The unit price of lithium carbonate has decreased from a peak of ¥600,000/t to the current ¥100,000/t, a decrease of over 80%. The total price of VPSA oxygen equipment can decrease by approximately ¥200,000 to ¥800,000 depending on different models.
Compared to traditional cryogenic air separation process, VPSA & PSA technology boasts prominent advantages in terms of lower construction costs and comprehensive operational expenses. Furthermore, with the overall price decline since 2023, it has attracted more attention from potential customers. In addition, with features including more flexible and reliable production capacity, simpler operation and maintenance, and wider range of applications, it’s highly favored in industries such as steel, non-ferrous metallurgy, glass, cement, and waste incineration, making it the optimal technology for meeting industrial oxygen production needs.
For 25 years, PKU Pioneer has been deeply involved in the VPSA and PSA industry, continuously driving innovations in oxygen generation technology and promoting greater efficiency in industrial oxygen supply. PKU Pioneer is the earliest Chinese manufacturer of the Li-Based molecular sieve, which plays a crucial role in maintaining oxygen’s stability, durability and purity. The successful application of radial-bed technology has laid the foundation for the construction of large-scale oxygen equipment, with the maximum oxygen flow of the VPSA-O2 system set up in a single factory reaching 100,000Nm3/h up to now. As the leader in the area, PKU Pioneer has provided high-quality oxygen unit solutions to over 400 users over the globe, helping them significantly reduce oxygen supply costs and achieve sustainable development.
(Partially reprinted from Bradley Intelligence Report)
