That's the other demand side factor: as the energy storage sector grows, demand for lithium-ion batteries will grow by leaps and bounds. By one estimate, the market could reach $92 billion by 2024, with a CAGR of 16%. The market was worth $21.6 billion in 2018.
A slightly more conservative estimate has the market reaching $40 billion by 2025, but that's still nearly 100% in growth in less than a decade. Another estimate is $60 billion by 2024. Due to declining prices, Bloomberg raised its forecast for lithium ion batteries due to lower than expected prices.
The best estimate is from Global Market Insights, which predicts energy storage and automotive lithium ion battery demand to double by 2024.
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The expectation from GMI is that the bulk of new battery production will come from China, where batteries have a large internal market.
So how will this play out in the lithium sector?
One major take-away here is that traditional lithium production—through salt-brine evaporation—may lose market share to newer and more competitive production methods, particularly spodumene or "hard-rock" lithium mining, where the lithium is extracted by drilling directly into rich deposits.
Extracting lithium in this way is cheaper, easier and faster—and it's starting to attract more attention, with multiple spodumene operations popping up in
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Australia. Lithium giant Albemarle has gone so far as to halt all expansions of salt brine in South America, the so-called "lithium triangle," and has instead been pouring resources into the Greenbushes project, where capacity is doubling.
Demand for spodumene is reflecting rising prices, which spiked in 2018 even as lithium prices across the board were slumping.
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