However, due to COVID-19 related impacts on market behavior, lithium supply temporarily surpassed demand-this resulted in a tapering of global production, a dramatic price drop, and a (false) sense of confidence. Until recently, lithium production has kept pace with rapidly expanding demand in the market. The shades of blue indicate degrees of risk – dark blue bars have solid footing, while lighter shades of blue indicate increased risk concerning production and availability. Yellow bars speak to proven production, while blue depicts additional forecasted production. The black line within the chart depicts current and forecasted market demand. The chart at figure 1 depicts the severity of the lithium supply problem. The next three to five years, in particular, promise to be especially challenging. 4 Global demand for lithium remains on track for tremendous growth in the coming years. The balance of raw lithium usage spreads across the following sectors: ceramics and glass – 18%, lubricating greases – 5%, polymer production – 3%, continuous casting mold flux powders – 3%, air conditioning equipment – 1%, small scale/niche uses – 5%. Presently, battery production consumes 65% of the lithium market, with most production occurring in China. 3 However, over the last fifteen years, batteries have consumed most of the world’s lithium supply. Various forms of lithium receive use across a wide range of commercial applications, including high-end manufacturing alloys, medicine, ceramics, and air conditioning. Demand has increased exponentially with improved battery technology and expanded product applications, including significant growth in telecommunications, transportation, and power storage. However, lithium’s supply and demand profile evolved in the twenty-first century. The combined features of resistance to deterioration, conductivity, and low weight relative to mass have made lithium an attractive material for batteries.Īs uses for lithium expanded during the twentieth century, supply generally kept pace. Lithium is also much lighter than most alkali metals. At room temperature, lithium is stable and does not easily break down when exposed to a sustained electrical charge. Lithium’s innate resistance to regular electrolysis remains key to the material’s usefulness. Global EV sales February 2011 – February 2022. Lithium price in China from January 2017 through March 2022. 2 From this point forward, lithium received use in a wide range of applications-most of which have emerged in the postindustrial era.įigure 2. 1 It was not until the latter half of the nineteenth century that scientists were able to isolate lithium through extreme heating paired with electrolysis. However, the use of the new metal proved difficult as it did not respond to conventional electrolysis-the process used to isolate and separate some metal elements found in the natural environment. Scientists identified lithium as a distinct alkali metal element in the year 1817. US policies and corresponding strategies must quickly evolve to address the ongoing and projected challenge to the lithium supply chain and the associated negative impact on DIB surge capacity.īackground–What lithium is/how it works/supply chain history Policymakers should view risk to the DIB and national security as unacceptable. ![]() ![]() The negative impact on the DIB’s surge capacity is not a forecasted problem instead, it is a present and worsening problem. With regard to national security, how lithium limits the surge capacity of the DIB is particularly concerning. ![]() Over the last decade, the lithium supply has lagged behind demand across the market. However, the fragility of the world’s lithium supply chain remains more challenging to perceive. The increasing reliance on lithium is readily apparent to casual observers. Uses for lithium within the DIB and the US economy continue to expand. Over the last twenty years, lithium (periodic symbol: Li) has evolved into a critical material for the US Defense Industrial Base (DIB). Impact of constrained lithium supply to the US defense industrial base
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