High Voltage: all the latest news driving battery metals stocks

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Each week Stockhead’s High Voltage column wraps all the news impacting ASX stocks with exposure to battery metals such as lithium, cobalt, graphite, manganese and vanadium:

Vanadium shattered the $US30/lb ceiling last week and kept going — but the sky-high spot prices haven’t trickled down into share increases for ASX vanadium focused juniors.

Cobalt prices continue to remain steady around $60,000/t.

And when it comes to lithium, don’t believe the bearish headlines – many contracted prices have actually been increasing this year and even exceeded the China spot price for the first time in the September quarter.

Most lithium is traded in long-term contracts, so while Chinese ‘spot’ or ‘internal’ prices for lithium carbonate have fallen back dramatically, they represent only a small portion of total purchases.

And even these prices have also steadied – which could mean good times ahead.

>> Scroll down for a table showing the recent performance of 200 ASX battery metal stocks

Overall, it was another “three steps back” kind of week, with a Thursday bloodbath resulting in the ASX Small Ords closing at yearly low.

Micro caps Red Mountain Mining — cobalt (ASX:RMX), Golden Deeps — vanadium (ASX:GED), and Latitude Consolidated – lithium (ASX:LCD) all made the largest percentage gains last week.

Kidman Resources (ASX:KDR), up 16 per cent to $1.07 last week, scored a $US100m loan from joint venture partner SQM to partially fund construction at its Mt Holland lithium project in Western Australia.

The share price of vanadium developer Technology Metals Australia (ASX:TMT) received a 7.2 per cent bump to 52c – representing a 166 per cent increase for the year.

But much of the action was at the other end.

Even Global Geoscience (ASX:GSC) – which claimed its Rhyolite Ridge project will be the world’s lowest cost lithium project — finished the week 8 per cent lower.

Explorer Cobalt Blue (ASX:COB) was the weeks biggest loser. It’s share price dropped 30 per cent to 21c after telling investors it wouldn’t rush a final feasibility study on its Thackaringa cobalt project to meet a mid-2019 deadline – forfeiting its chance to grab full ownership.

Industry News

Despite bearish headlines about oversupply fears, many lithium prices are increasing, according to new Roskill analysis.

While Chinese ‘spot’ or ‘internal’ prices for lithium carbonate have fallen back dramatically, they represent only a small portion of total lithium carbonate purchases.

“[Contracted carbonate prices] have been steadily increasing throughout 2018 and actually exceeded the China spot price for the first time in [the September quarter of] 2018,” said David Merriman, lithium supply specialist at Roskill.

Roskill expects prices to increase steadily as contracts are renegotiated between miners and consumers.

And good news for all Aussie lithium miners and explorers — despite expansions at existing mines and the commissioning of new mines, supply will still struggle to keep pace with demand.

ASX graphite stocks could get a real boost next year when Chinese exporters of the battery metal get hit with a 25 per cent US tariff.

That’s good news for Australian graphite producers because it means US steel-makers, battery and car manufacturers may look elsewhere for supply.

And nickel miners are increasingly pivoting towards battery-grade nickel production for the coming EV and stationary storage boom, delegates at the Nickel Conference 2018 in Perth heard.

Nickel is already the most significant metal in lithium-ion battery cathodes used in EVs.

Michael Rodriguez, chief operating officer at emerging producer Poseidon Nickel (ASX:POS), said “300,000 tonnes of nickel going into the battery industry in the next two years is certainly possible”.

The current nickel market is roughly 2.2 million tonnes, of which over 70 per cent is still consumed in stainless steel.

“There’s a number of views on this, but what I can say is technology adoption always happens faster than we think it will,” he said.

“By 2023, I think that [EV] penetration will be better than what we are forecasting.”

Here’s a table showing the recent performance of 200 ASX battery metal stocks:

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