High Voltage: All the news driving battery metals stocks
Mining & Resources
Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
Scroll down for a table showing the recent performance of 200 ASX battery metal stocks >>
Is lithium about to make a comeback?
The consensus from hard rock lithium producers Pilbara Minerals and Galaxy Resources is that that prices have stabilised.
Pilbara (ASX:PLS) shipped 46,682 tonnes of 6 per cent spodumene concentrate at an average selling price of US$742/ tonne ($1036) in the December quarter.
Galaxy Resources (ASX:GXY) reported an average cash margin of $US288 ($402) per tonne for its 5.76 per cent spodumene concentrate, down 30 per cent on the prior quarter.
But Galaxy told investors that Chinese domestic lithium chemical prices had plateaued following several months of retreat.
Many have interpreted this as “signalling the bottom of the pricing cycle within this region,” Galaxy says.
“Key indicators point to a more buoyant market environment throughout 2019 … and the combination of strong demand growth and supply challenges support a favourable market moving forward.”
China is spending big $$ to lock down cobalt supply
The fact that cobalt is on the nose with investors right now doesn’t seem to be bothering Chinese companies.
China Molybdenum (CMOC) recently announced it was shelling out $1.6 billion to increase its stake in DRC-based copper cobalt miner Tenke Fungurume Mining.
Analysts at Roskill also say several other near-term projects are being developed by Chinese firms in the DRC – which has about half of the world’s cobalt reserves.
As China locks down these crucial supply chains, Japan automakers have announced a joint procurement body to secure (and stable) cobalt supplies, according to Reuters.
The joint body could either secure supplies through long-term contracts with existing global suppliers or by investing in new projects, with financial backing from the Japanese government.
2022 – the year EVs become affordable
The magical $100 per kWh price tag for a battery pack is thought to be the tipping point where EV and internal combustion engine (ICE) costs reach parity.
Benchmark Mineral Intelligence boss Simon Moores says 2019 could be the year lithium ion batteries go below $100/kWh.
By 2022 electric vehicles (EVs) will cost the same as a regular car, according to accounting firm Deloitte.
Deloitte says while the upfront cost of EVs still remains the biggest barrier for consumers, as technology improves this and other consumer concerns will gradually ease over time.
The firm predicts that the cost of “battery electric vehicles” (BEVs) will match petrol and diesel in the UK by 2021 and globally by 2022.
This is expected to see the number of EVs on the roads spike by a huge 950 per cent to 21 million by 2030, with BEVs accounting for 70 per cent of total EV sales.
However, with established carmakers rapidly ramping up supply and the emergence of new entrants, we could be facing a saturated market.
“As manufacturers increase their capacity, our projections suggest that supply will vastly outweigh consumer demand by approximately 14 million units over the next decade,” Deloitte says.
Not the strongest week for battery metals — of the companies on our list, about 96 lost ground, 35 were ahead and 56 were steady.
Here’s how that looks for the month of January:
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