Battery metal prices in China are pushing higher. The rest of the world will soon follow
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Recent data from Benchmark Mineral Intelligence – the OG reporting agency for everything battery-related – confirms recent strong price increases for mainstream battery metals like lithium, cobalt, nickel, and graphite.
This has been largely driven by the Chinese market, which “acts as an early warning system for the rest of the world” Benchmark managing director Simon Moores says.
“Historically, price rises that occur in China are usually experienced in the rest of the world 3 to 6 months later,” he says.
“While rises remain in their infancy, there is growing evidence that the low-price environment for many battery raw materials is beginning to change.”
Markets are responding. A “wall of buying” was unleashed on battery metals stocks on the ASX last week, says Far East Capital analyst Warwick Grigor.
“Who needs to be playing gold now when you are getting this sort of performance from the more exotic commodities?”
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, and vanadium are performing>>>
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:
As in lithium, there is a general trend for graphite explorers/miners to move downstream to capture more value.
A lot more value.
One of these is Ecograf, which signed a $US98m ($137.2m) agreement with the WA government to build the first spherical graphite processing facility outside China, with construction set to begin in mid-2021.
This explorer just raised $20.6m from overseas institutional investors at a 12 per cent premium to its 10 day volume weighted average share price (VWAP).
Lake’s flagship Kachi lithium brine project now fully funded through to the construction phase in 2022, it says.
“This transaction places the company in its strongest financial position ever,” managing director Steve Promnitz says.
“Lake will hold in excess of A$25 million following this placement and anticipates a further $6m to be added by July as existing options convert.”
The lithium ferro phosphate (LFP) battery market will grow 500 per cent by 2030, Lithium Australia says.
LFPs – which minimise or replace costly nickel and cobalt – are good for short range trips, like in urban settings.
Demand has taken off in China, and Lithium Australia reckons its battery R&D subsidiary VSPC is now well-positioned to service LFP markets outside China.
This micro-cap graphite explorer is now up ~70 per cent over the past week on no news.
In response to an ASX query last week it pointed to “several recent media reports about increasing world demand for clean energy battery products and references to the growing demand for graphite products that contribute to the manufacture of lithium-ion batteries”.
A Bankable Feasibility Study (BFS) — an advanced study designed to attract financing — on Blackearth’s Maniry graphite project in Madagascar is due to be completed this year.