Pilbara Minerals (ASX:PLS) quietly hit an all-time high last week and support for battery metals remains solid.

It is up 2.46% this morning, rising even further to $2.50, giving the Ken Brinsden led miner a market cap of $7.25 billion.

Mineral Resources (ASX:MIN), IGO (ASX:IGO), Liontown (ASX:LTR) and AVZ Minerals (ASX:AVZ) were among the lithium companies to catch a ride, with other battery metals plays heavily green as well.

Nickel miner Nickel Mines (ASX:NIC), rare earths play Australian Strategic Materials (ASX:ASM) and platinum miner Zimplats (ASX:ZIM) were among the big miners leading the mid-caps.

According to Fastmarkets, prices in East Asia are catching up to the market leader in China, with lithium carbonate pricing up 5.6% to US$28.25/kg in China, Japan and Korea.

Lithium hydroxide pricing remains strong at US$29/kg.


Ground Breakers share prices today:



How long will battery metals run?

Ausbil’s global resources fund co-portfolio manager James Stewart says lithium prices will remain elevated for some time, predicting any major supply response is at least 18 months away.

“There’s very limited excess supply capacity available to come online in the lithium market, with existing projects generally already running at capacity, and mothballed projects already restarting. Because of this, we expect lithium prices to remain elevated for some time until we see a supply response,” he said in the fund’s battery minerals outlook today.

“In the long term, lithium prices are likely to fall, when a supply response comes through, but we believe this is at least 18 months away.

“Right now, we believe market estimates are too low. So, we expect to see earnings upgrades for lithium companies, which is likely to see producers’ share prices continue to trend upwards.”

Stewart said we are now at an “inflection point for EV sales”. While materials supply has been suggested as a major roadblock for the growth of the industry, Stewart believes the issue will be pricing signals more than physical availability of the metals in question, particularly when it comes to nickel.

“In the short term, a risk for sales forecasts is the availability of components (including semiconductors, and battery components and raw materials). In the long run, these issues will be resolved, but there will be bumps in the road along the way,” he said.

“In graphite – there’s synthetic and natural, the former relying heavily on oil as a by-product. As a result, the market in China for natural graphite processing has gone through the roof, there are no constraints. We have seen very high oil prices and also the China government constraining the operations of any energy-intensive industries.

“My view is similar on nickel, where there are two types. This first is nickel briquettes, used as the feed source for battery production. That market will become tight in time because aren’t a lot of new nickel mines. This means there’s also a huge market for the second, nickel pig-iron, which is another way of producing a lower-grade nickel.

“There will be nickel available, it’s just down to the price that will be needed to get that into the market. But we don’t see a physical constraint in the availability of nickel.

“And in lithium, the only bottlenecks are in either mining or refining. Here in Australia, it’s the former – there’s not enough brine or spodumene coming out of the ground. But there is plenty of refining capacity currently. And over time, it’s easy to build new mines and bring on new technology to meet the market.”


Gold pushes US$1870/oz

Gold futures edged towards US$1870/oz to end last week as higher than expected inflation numbers out of the US helped the safe haven commodity break its low-$1800s resistance level.

Spot gold was trading at US$1862.50 ($2538/oz) at 12.30pm AEDT.

Miners reported modest gains across the board, with African gold producer Perseus (ASX:PRU) the standout in the precious metals sector.

The materials index was up ~0.5% as of 12.30 AEDT.


Perseus share price today: