High Voltage: all the latest news driving battery metals stocks

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Each week High Voltage tracks a basket of about ASX 200 battery metals stocks including explorers with exposure to lithium, cobalt, graphite, manganese and vanadium — stocks that are used in energy storage and generally driven by battery news, even if their main application is not yet battery storage.

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

Last week vanadium continued its rapid ascent towards $US30 a pound – with spot prices at over $US29 a pound by the end of trading on Thursday, October 18.

But with a number of juniors jumping into the space, the big question for investors is — is this price range sustainable?

We are very close to the record prices seen in 2005, which was followed by a price collapse that occurred with frightening velocity.

This time, many analysts and miners see it playing out differently — mostly because demand will continue to grow, and prices will stay high until new supply hits the market.

Manganese prices came off slightly last week, but – like graphite — are still on a solid upward trajectory.

Cobalt may be stabilising after big falls between June and August, with LME cash buyer prices continuing to bounce between about $US57,000 per tonne and $US62,000 per tonne.

Lithium prices continue to fall — the opaque nature of pricing means its hard to tell for certain — but the gap between lower Chinese prices and healthier rest-of-world prices is widening.

A flood of ‘cheap’ (read: expensive to produce but sold at discounted prices) local supply has seen Chinese lithium carbonate prices have now more than halved since January.

It was also a better week for miners and explorers. Of the 196 battery metals stocks on our list, about 63 lost ground, 75 were ahead, and 58 were steady.

One of the biggest winners was European Lithium (ASX:EUR) which had jumped over 36 per cent to 12c by Oct 19. This now represents a 150 per cent premium to their share price 12 months ago.

Lincoln Minerals (ASX:LML) was up 25 per cent to 1c, after telling investors metallurgical test work on graphite from its Kookaburra Gully project was in the final stages.

A 25 per cent boost to 12.5c for Collerina Cobalt (ASX:CLL) mean the high purity alumina (HPA) focused explorer is up almost 100 per cent for the year.

King River Copper (ASX:KRC) jumped 24.5 per cent to 5.6c – and is now up a whopping 700 per cent for the year.

King River is due to release a scoping study for its vanadium-titanium-iron project this month.

Investors also rewarded Talga Resources (ASX:TLG) with a 20 per cent boost to 53c after the company claimed its lithium-ion battery anode product outperformed  the “commercial benchmark”, and enabled ultra-fast battery charging.

Battery Megafactory count keeps growing

Despite precipitous price falls in many base and battery metals, year-to-date price averages are still higher than last year, according to Wood Mackenzie experts at the LME Week event in London.

And the “narrative remains positive for both [lithium and cobalt] given the rising requirements for EV [electric vehicle] and energy storage”, Wood Mackenzie says, reinforcing the consensus optimistic outlook from analysts and industry experts.

Nickel has been this year’s best performer, with average prices to the end of September 36 per cent higher compared with the same period in 2017.

Going forward, some $100 billion worth of investment in new nickel production is needed to meet projected EV demand, says the world’s biggest producer Vale.

The market had a “structural global deficit” of 140,000 tonnes this year – meaning far more nickel was being consumed than produced.

Battery makers may say they are getting closer to replacing lithium-ion batteries with solid state batteries, but one analyst predicts existing lithium-ion technologies to be the major area of growth in the market for at least the next five years.

Which is good for Dutch battery maker Lithium Werks BV, which will spend $2.6 billion on a gigantic lithium-ion cell factory in China.

Tesla likewise announced a new Chinese megafactory last week – taking the current count above 50 globally – as EV demand continues to surge beyond current capacity.

Tesla makes an enormous $2 billion bet on China, will build Gigafactory in Shanghai pic.twitter.com/64L7qvvGxz

— Reuters (@Reuters) October 18, 2018

China – the world’s largest market and maker of electric vehicles (or EVs) — has “a lot of powerful reasons to force electrification” — both economic and strategic, Mark Schwartz from S&P Global Platts said.

At current population growth rates, if China does not embrace EV it could theoretically end up having to import 20 million barrels per day of oil.

“That’ll never happen,” Mr Schwartz says.

Here’s a table of ASX battery metal stocks with exposure to lithium, cobalt, graphite, manganese and vanadium:

Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop

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