Exploring behavior changes of the lithium market in China: Toward technology-oriented future scenarios

Donghui Liu, Xiangyun Gao, Haizhong An, Yabin Qi, Ze Wang, Nanfei Jia and Zhihua Chen

Resources Policy, 2020, vol. 69, issue C

Abstract: The lithium market in China has experienced great changes due to emerging renewable energy technologies. Recycling, substitution and brine mining technologies are expected to alleviate the undersupply of lithium resources. However, these technologies cause much uncertainty, which affects market stability. To explore the behavior changes of the lithium market that are affected by these related technological developments, a system dynamics model is established, and bifurcation theory is employed to analyze market stability. Technological development is based on three scenarios: a step signal shock, a slope signal shock and a continuous change. The results show that when there is a step signal to the four kinds of technological development, the lithium market will go through fierce fluctuations that are especially affected by the step shock of the emerging renewable technologies. When there is a slope signal to the four technological developments, the lithium market moves toward a more stable situation, but the undersupply cannot be alleviated as much as it can with the step signal. When the technological developments are continuously changed, there are some obvious sudden changes in the lithium market. When technology develops to some extent, the market behavior can remain unchanged for a wide range of periods. On this condition, more incentives will not work. It can be finally concluded that lithium substitutes show a great potential to alleviate the undersupply situations and maintain a stable environment in the lithium market. More studies and investments should be put into substitution technology.

Keywords: Lithium market; Technological development; System dynamics; Dynamic simulation; Bifurcation theory (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:69:y:2020:i:c:s0301420720309168

DOI: 10.1016/j.resourpol.2020.101885

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