Lithium miners are reporting strong profits for the first half of the year thanks to stronger demand for battery storage, Bloomberg reported today, noting some of them are planning production ramp-ups and capacity expansion.
Two Chinese lithium majors – Tianqi Lithium Corp. and Ganfeng Lithium Group – reported their biggest profits in three years for the first six months of the year, the report said. U.S. Albemarle said global lithium demand had risen 45% year over year through May, driven largely by strong demand for battery storage. Supply has grown more slowly, creating a gap benefiting lithium miners.
“Overseas supply may be affected by policy and logistics, and some production restarts will take time for actual supply to return to the market,” Tianqi Lithium Corp. officials warned, as quoted by Bloomberg, suggesting there was further upside potential for lithium prices down the road.
Earlier this year, the world’s top battery maker, Chinese CATL, said it expected energy storage to account for about half of its global sales by 2030 as the buildout of wind and solar drives demand for batteries that can store excess electricity for later use.
The war in the Middle East has served as an additional catalyst for demand for battery storage – and lithium – as energy-importing countries double down on their alternative energy plans to reduce their dependence and vulnerability to Middle Eastern oil and gas.
Battery storage has become increasingly important for grids with large amounts of weather-dependent wind and solar generation. Because output from these sources does not always coincide with electricity demand, batteries can store excess power and release it when needed. They are one of several tools available to balance electricity systems, alongside flexible generation, transmission links, demand response and other forms of energy storage.
By Irina Slav for Oilprice.com
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