High Voltage: All the news driving battery metals stocks
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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 >>
The boss of one emerging manganese producer says battery metals are currently on the nose with investors because they jumped the gun over the whole electric vehicle thematic.
Despite this, rapidly growing demand is very real.
“There was a huge enthusiasm for battery raw materials well in advance of the emergence of the real demand for these products,” Euro Manganese (ASX:EMN) CEO Marco Romero told Stockhead.
“I think there was an excessive exuberance … followed by a disappointment.
“There probably will be other rushes, other ups and downs in the market over time, but there is no doubt that the fundamental demand for these products is on the increase and will be so for the foreseeable future.”
The proof is in the billions of dollars being spent by major carmakers, according to Mr Romero.
And now these major carmakers are even flirting with direct investment in cobalt miners so they have a stable, long term supply of the EV battery ingredient.
Carmakers don’t need their own personal cobalt mines just yet, but “it is certainly a topic of conversation,” Ted Miller, head of energy storage strategy and research at Ford says.
This follows speculation that Japanese car and battery makers Toyota, Honda and Panasonic are considering a joint venture to secure cobalt for EV batteries.
Total global cobalt production in 2017 was 110,000 tonnes, with battery use accounting for around 40 per cent of that.
Roskill analysts expect cobalt demand from the battery sector alone to reach nearly 100,000 tonnes by 2020 and the market as a whole to reach over 155,000 tonnes.
Mr Miller also reiterated that automakers are trying hard to reduce their dependency on cobalt, which is relatively expensive and primarily mined out of the politically sensitive Democratic Republic of Congo (DRC).
Not only has the DRC just hiked royalties on cobalt to 10 per cent – almost triple the previous levy of 3.5 per cent — existing producers in the country are having critical production issues.
These production issues could actually inject some life back into the flatlining cobalt market.
Glencore subsidiary Katanga Mining was in the midst of ramping up to 34,000 tonnes per year of cobalt hydroxide in 2019 – that’s equivalent to 21 per cent of global supply.
The amount of product Katanga now expects to export in 2019? Nada.
In November last year, Glencore announced that 20,000 tonnes of cobalt hydroxide sales would be removed from the market until the third quarter of 2019 after discovering low levels of radioactivity.
Now this wave of supply has been deferred until at least 2020 after the DRC Government wasn’t convinced of Glencore’s plan to remove the radioactivity from the cobalt.
Katanga now reckons that if it gets the green light from the DRC government it can start commissioning its ion exchange plant in the fourth quarter of 2019.
“The market had been expecting a glut of material to hit the market in the second half of 2019,” Marcel Goldenberg, metals pricing analyst at S&P Global Platts told Stockhead.
“Yet, the announcement from Katanga and the subsequent loss of expected cobalt supply from the global market in the second half of 2019 may cause the recent price trends to be reversed, according to market sources.”
Of the companies on our list, about 80 lost ground, 54 were ahead and 58 were steady this week.
Here’s how that looks for the year so far:
This week’s big winners included US-based lithium explorer Anson Resources (ASX:ASN) and Canadian cobalt player Blackstone Minerals (ASX:BSX), up 28 per cent for the week.
High Purity Alumina (HPA) hopeful Andromeda (ASX:ADN) has caught the eye of a company which supplies global battery maker LG Chem.
HPA, which can be created from an aluminous clay called kaolin, is in demand because it helps stop lithium-ion batteries from catching fire.
South Australian based Andromeda said that discussions were now “in progress” regarding the use of the explorer’s halloysite-kaolin for HPA production in China.
The $6.1m market cap explorer finished the week up 17 per cent.
Cobalt explorers Corazon (ASX:CZN) and Buxton Resources (ASX:BUX), vanadium focused Auteco (SX:AUT), and graphite player Lincoln Minerals (ASX:LML) were also in the top 10 this week.
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