iPad Demand Causes Tightness in Lithium Market
Demand for iPads is causing severe tightness in the market for lithium and lithium batteries. Prices for lithium have tripled since 2000 and the market is now valued at $1 billion as the metal is being used in vehicle batteries, ceramics, electronics, and lubricants. According to Bloomberg, the largest suppliers of lithium are Talison Lithium Ltd., Soc. Quimica & Minera de Chile SA, Rockwood Holdings (NYSE: ROC) and FMC Corp. (NYSE: FMC). These producers account for around 95 percent of global supply. The advantage of lithium batteries over competing models is that they can generate more electricity on a per-cell basis.
Talison CEO Peter Oliver said that the market could double or triple over the next 10 years, depending on the traction of electric vehicles. “Anywhere between a doubling and a tripling of demand in the next 10 years is absolutely our view. Maybe a doubling is with minimal impact from electric vehicles, and if electric vehicles take off in a big way in the next 10 years it could be as much as tripling.”
The tablet computer market, led by Apple's iPad, is one of the big growth areas for lithium and lithium batteries. Worldwide shipments of tablets this year will be roughly 107.4 million versus earlier projections of 106.1 million according to market researcher International Data Corp (IDC). Next year, the number of tablet shipments could hit 142.8 million and 222.1 million by 2016, according to IDC's research.
The Toyota Prius has also been a catalyst for lithium demand. The electric vehicle, which went on sale in Japan in 1997, became the world's third best-selling car line in the first-quarter of 2012, with 247,230 vehicles sold. The newest model Prius contains a lithium-ion battery which is supplied by Panasonic according to Bloomberg.
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