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High Voltage: An ‘avalanche’ is laying waste to lithium prices, as predicted
Mining
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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.
INDUSTRY FOCUS
Morgan Stanley copped criticism when it predicted that an avalanche of lithium supply would decimate prices back in February 2018.
Macquarie got similar treatment when it forecast a “tsunami of oversupply” in a note titled Lithium: Welcome to Thunderdome.
But here we are, as prophesied, with prices now at multi-year lows.
July another tough month for #lithium chemical producers, with global average prices down 8% for carbonate and 5% for hydroxide. Still up ~40% on pre-price spike but excess supply/lower-feedstock costs are likely to cause more pressure in the coming weeks @benchmarkmin pic.twitter.com/gCHeA0NnHX
— Andrew Miller (@amiller_bmi) August 5, 2019
WA spodumene producers are hurting as prices fall from over $US1000 ($1476) a tonne to well under $US600 a tonne.
Over the past 12 months, Pilbara Minerals (ASX:PLS) is down 48 per cent, Altura Mining (ASX:AJM) 67 per cent, Galaxy Resources (ASX:GXY) 48 per cent, and Alita Resources (ASX:A40) 75 per cent.
Alita is looking particularly shaky right now, and some are predicting it may become the first major casualty of a weakening market.
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But here’s the thing; while prices for lithium and cobalt products have continued to fall, “long term demand projections haven’t budged and are still very much intact”, writes lithium expert Chris Berry.
This is a sector-wide paradox that has only become more glaring over the past 12 months, he says.
Industry-specific factors are important, he says, but it’s clear that a convergence of macro “economic and geopolitical factors” — trade wars, Brexit, colossal debt piles — are spooking investors and delaying capital spending by companies.
These decisions certainly mean delays ramping up to meet that consensus 1 million tonnes a year of lithium carbonate equivalent (LCE) demand by 2025.
And let’s be clear; 1mtpa is still the consensus (sans Morgan Stanley, which is predicting 750,000tpa).
Albemarle recently confirmed as much, even as it put the kibosh on 125,000tpa of previously announced conversion capacity.
“The industry is clearly starved for capital and while it’s true that assets can get cheaper, the requirement for funding to electrify transport is needed now – not in 2025 or beyond,” Berry says.
“Any significant delay in capital allocation here almost assures a delay in more widespread EV uptake.”
SMALL CAP SPOTLIGHT
It was clearly a rough week for most stocks, and battery metals didn’t escape the bloodbath:
Ouch.
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:
| Code | Name | Price [Monday intraday] | Market Cap | 1 Year Return % | 1 Week Return % |
|---|---|---|---|---|---|
| GPP | GREENPOWER ENERGY | 0.002 | $4,004,490.50 | -60 | 100 |
| MTB | MOUNT BURGESS MINING | 0.003 | $1,560,388.13 | -57 | 50 |
| NWC | NEW WORLD COBALT | 0.027 | $18,530,974.00 | -41 | 41 |
| THR | THOR MINING | 0.013 | $12,324,703.00 | -53 | 36 |
| NVA | NOVA MINERALS | 0.046 | $37,905,900.00 | 86 | 24 |
| CUL | CULLEN RESOURCES | 0.015 | $2,541,972.50 | -52 | 15 |
| CNJ | CONICO | 0.012 | $4,612,778.50 | -55 | 9 |
| EUC | EUROPEAN COBALT | 0.027 | $20,565,828.00 | -45 | 8 |
| GME | GME RESOURCES | 0.06 | $30,374,576.00 | -40 | 7 |
| LCD | LATITUDE CONSOLIDATED | 0.016 | $4,402,864.00 | -41 | 7 |
| BOA | BOADICEA RESOURCES | 0.175 | $9,247,905.00 | 46 | 6 |
| MTC | METALSTECH | 0.02 | $2,222,123.75 | -81 | 6 |
| PGM | PLATINA RESOURCES | 0.046 | $11,621,554.00 | -54 | 5 |
| BAR | BARRA RESOURCES | 0.021 | $11,855,596.00 | -39 | 5 |
| AVZ | AVZ MINERALS | 0.051 | $117,511,568.00 | -46 | 2 |
| DGR | DGR GLOBAL | 0.093 | $57,639,096.00 | 6 | 1 |
| GBE | GLOBE METALS AND MINING | 0.016 | $7,454,758.00 | 23 | 0 |
| NZC | NZURI COPPER | 0.325 | $96,169,288.00 | 44 | 0 |
| HGM | HIGH GRADE METALS | 0.008 | $3,623,503.00 | -78 | 0 |
| CGM | COUGAR METALS | 0.001 | $1,176,583.25 | -80 | 0 |
| RIE | RIEDEL RESOURCES | 0.012 | $5,016,836.50 | -67 | 0 |
| AYR | ALLOY RESOURCES | 0.002 | $3,386,555.25 | -67 | 0 |
| DHR | DARK HORSE RESOURCES | 0.004 | $8,098,486.50 | -64 | 0 |
| SI6 | SIX SIGMA METALS | 0.004 | $3,121,890.75 | -44 | 0 |
| POW | PROTEAN ENERGY | 0.007 | $2,180,060.75 | -75 | 0 |
| SYA | SAYONA MINING | 0.008 | $15,503,169.00 | -73 | 0 |
| LRS | LATIN RESOURCES | 0.001 | $3,892,466.50 | -80 | 0 |
| WCN | WHITE CLIFF MINERALS | 0.004 | $1,881,399.50 | -92 | 0 |
| DTM | DART MINING | 0.005 | $5,086,880.50 | -38 | 0 |
| LTR | LIONTOWN RESOURCES | 0.11 | $184,532,544.00 | 311 | 0 |
| CZR | COZIRON RESOURCES | 0.01 | $20,830,512.00 | -33 | 0 |
| MNS | MAGNIS ENERGY TECHNOLOGIES | 0.17 | $106,948,800.00 | -52 | 0 |
| VRC | VOLT RESOURCES | 0.016 | $23,621,182.00 | -11 | 0 |
| MZN | MARINDI METALS | 0.001 | $2,248,371.00 | -87 | 0 |
| PAN | PANORAMIC RESOURCES | 0.38 | $204,825,520.00 | -19 | 0 |
| CHN | CHALICE GOLD MINES | 0.18 | $50,702,604.00 | 64 | 0 |
| BDI | BLINA MINERALS | 0.001 | $4,593,882.50 | -50 | 0 |
| MLM | METALLICA MINERALS | 0.015 | $4,860,711.00 | -58 | 0 |
| KNL | KIBARAN RESOURCES | 0.12 | $35,114,516.00 | -23 | 0 |
| AVL | AUSTRALIAN VANADIUM | 0.014 | $27,633,814.00 | -76 | 0 |
| ANW | AUS TIN MINING | 0.007 | $15,509,807.00 | -53 | 0 |
| MRR | MINREX RESOURCES | 0.01 | $958,777.25 | -69 | 0 |
| PSM | PENINSULA MINES | 0.003 | $3,038,616.25 | -63 | 0 |
| PSC | PROSPECT RESOURCES | 0.16 | $37,752,280.00 | -41 | 0 |
| PM1 | PURE MINERALS | 0.016 | $6,953,581.00 | 14 | 0 |
| AZI | ALTA ZINC | 0.003 | $5,464,903.00 | -45 | 0 |
| ADV | ARDIDEN | 0.003 | $5,071,560.50 | -73 | 0 |
| FEL | FE | 0.018 | $7,312,559.00 | -33 | 0 |
| MLS | METALS AUSTRALIA | 0.0025 | $5,854,395.50 | -50 | 0 |
| PNN | PEPINNINI LITHIUM | 0.0025 | $3,714,035.25 | -74 | 0 |
| MTH | MITHRIL RESOURCES | 0.005 | $2,111,946.00 | -55 | 0 |
| PIO | PIONEER RESOURCES | 0.015 | $24,140,140.00 | -16 | 0 |
| KSN | KINGSTON RESOURCES | 0.019 | $29,889,408.00 | -13 | 0 |
| LIT | LITHIUM AUSTRALIA | 0.049 | $26,120,106.00 | -50 | 0 |
| ARE | ARGONAUT RESOURCES | 0.006 | $9,326,284.00 | -76 | 0 |
| KOR | KORAB RESOURCES | 0.025 | $7,929,987.00 | -7 | 0 |
| CRL | COMET RESOURCES | 0.028 | $8,047,500.00 | -24 | 0 |
| RMX | RED MOUNTAIN MINING | 0.005 | $4,668,220.50 | -14 | 0 |
| VR8 | VANADIUM RESOURCES | 0.068 | $24,644,802.00 | -59 | 0 |
| TKL | TRAKA RESOURCES | 0.01 | $3,704,629.50 | -69 | 0 |
| MQR | MARQUEE RESOURCES | 0.1 | $4,353,510.00 | -44 | 0 |
| BYH | BRYAH RESOURCES | 0.074 | $4,720,497.50 | -43 | 0 |
| KDR | KIDMAN RESOURCES | 1.89 | $765,067,072.00 | 59 | 0 |
| HXG | HEXAGON RESOURCES | 0.085 | $24,801,588.00 | -45 | -1 |
| DEV | DEVEX RESOURCES | 0.075 | $9,978,793.00 | 4 | -1 |
| TON | TRITON MINERALS | 0.044 | $40,794,080.00 | -19 | -2 |
| CXO | CORE LITHIUM | 0.04 | $31,531,266.00 | -23 | -2 |
| E25 | ELEMENT 25 | 0.19 | $17,462,382.00 | 3 | -3 |
| JMS | JUPITER MINES | 0.3775 | $724,826,688.00 | 30 | -3 |
| CLQ | CLEAN TEQ | 0.375 | $272,457,984.00 | -41 | -3 |
| BEM | BLACKEARTH MINERALS | 0.071 | $6,080,401.00 | -45 | -3 |
| PLS | PILBARA MINERALS | 0.455 | $851,653,376.00 | -47 | -3 |
| SEI | SPECIALITY METALS INTERNATIONAL | 0.029 | $28,499,160.00 | 66 | -3 |
| LPI | LITHIUM POWER INTERNATIONAL | 0.4 | $111,568,408.00 | 52 | -3 |
| ZNC | ZENITH MINERALS | 0.075 | $15,957,160.00 | -52 | -4 |
| GED | GOLDEN DEEPS | 0.025 | $5,302,019.50 | -14 | -4 |
| SUH | SOUTHERN HEMISPHERE MINING | 0.025 | $2,211,736.75 | -59 | -4 |
| CAZ | CAZALY RESOURCES | 0.025 | $7,196,554.00 | -32 | -4 |
| NXE | NEW ENERGY MINERALS | 0.024 | $3,669,490.50 | -82 | -4 |
| AJM | ALTURA MINING | 0.093 | $223,244,400.00 | -65 | -4 |
| AUZ | AUSTRALIAN MINES | 0.024 | $82,673,816.00 | -65 | -4 |
| COB | COBALT BLUE | 0.125 | $17,988,302.00 | -78 | -4 |
| INF | INFINITY LITHIUM | 0.067 | $14,100,607.00 | 3 | -4 |
| LPD | LEPIDICO | 0.025 | $96,770,704.00 | -14 | -4 |
| TNG | TNG | 0.089 | $98,959,968.00 | -32 | -4 |
| KTA | KRAKATOA RESOURCES | 0.022 | $2,970,000.00 | -29 | -4 |
| SVM | SOVEREIGN METALS | 0.105 | $39,520,104.00 | 57 | -4 |
| MIN | MINERAL RESOURCES | 13.565 | $2,533,687,808.00 | -2 | -4 |
| POS | POSEIDON NICKEL | 0.042 | $110,993,480.00 | -25 | -5 |
| BUX | BUXTON RESOURCES | 0.1 | $13,605,543.00 | -46 | -5 |
| JRV | JERVOIS MINING | 0.205 | $126,442,704.00 | -29 | -5 |
| MEI | METEORIC RESOURCES | 0.039 | $34,671,128.00 | 34 | -5 |
| 4CE | FORCE COMMODITIES | 0.02 | $9,426,940.00 | -50 | -5 |
| GPX | GRAPHEX MINING | 0.19 | $19,122,590.00 | -10 | -5 |
| CLA | CELSIUS RESOURCES | 0.019 | $13,629,925.00 | -84 | -5 |
| WML | WOOMERA MINING | 0.025 | $4,083,356.50 | -67 | -5 |
| ASN | ANSON RESOURCES | 0.037 | $19,248,662.00 | -68 | -5 |
| WKT | WALKABOUT RESOURCES | 0.255 | $82,381,736.00 | 79 | -5 |
| KAI | KAIROS MINERALS | 0.019 | $14,488,638.00 | -50 | -6 |
| INR | IONEER | 0.165 | $243,372,272.00 | -40 | -6 |
| GLN | GALAN LITHIUM | 0.16 | $22,256,822.00 | -39 | -6 |
| RNU | RENASCOR RESOURCES | 0.015 | $18,454,790.00 | -20 | -6 |
| AGY | ARGOSY MINERALS | 0.094 | $95,363,200.00 | -66 | -6 |
| MZZ | MATADOR MINING | 0.3 | $29,581,250.00 | 3 | -6 |
| SO4 | SALT LAKE POTASH | 0.755 | $191,990,240.00 | 67 | -6 |
| LKE | LAKE RESOURCES | 0.0575 | $27,737,802.00 | -36 | -6 |
| HRZ | HORIZON MINERALS | 0.145 | $62,056,404.00 | -12 | -6 |
| AMD | ARROW MINERALS | 0.014 | $5,201,568.50 | -30 | -7 |
| HAV | HAVILAH RESOURCES | 0.14 | $30,554,868.00 | -32 | -7 |
| N27 | NORTHERN COBALT | 0.027 | $1,782,264.75 | -81 | -7 |
| AML | AEON METALS | 0.16 | $102,643,136.00 | -52 | -8 |
| NMT | NEOMETALS | 0.18 | $97,998,880.00 | -34 | -8 |
| FGR | FIRST GRAPHENE | 0.24 | $102,062,760.00 | 34 | -9 |
| IDA | INDIANA RESOURCES | 0.021 | $3,108,308.50 | -59 | -9 |
| BPL | BROKEN HILL PROSPECTING | 0.031 | $4,584,385.50 | -56 | -9 |
| VML | VITAL METALS | 0.01 | $17,426,112.00 | 25 | -9 |
| CHK | COHIBA MINERALS | 0.012 | $6,646,142.50 | 43 | -9 |
| IEC | INTRA ENERGY | 0.01 | $3,877,240.25 | -33 | -9 |
| TLG | TALGA RESOURCES | 0.42 | $94,416,488.00 | -1 | -10 |
| ARL | ARDEA RESOURCES | 0.5 | $55,330,928.00 | -34 | -10 |
| AEE | AURA ENERGY | 0.01 | $11,223,708.00 | -55 | -10 |
| BKT | BLACK ROCK MINING | 0.071 | $42,159,660.00 | 89 | -10 |
| HNR | HANNANS | 0.01 | $17,891,590.00 | -47 | -10 |
| SYR | SYRAH RESOURCES | 0.7175 | $291,428,960.00 | -70 | -10 |
| PLL | PIEDMONT LITHIUM | 0.13 | $105,999,448.00 | -21 | -10 |
| PUR | PURSUIT MINERALS | 0.009 | $1,893,734.75 | -91 | -11 |
| BSM | BASS METALS | 0.009 | $22,478,996.00 | -65 | -11 |
| JRL | JINDALEE RESOURCES | 0.34 | $11,912,221.00 | 24 | -12 |
| TMT | TECHNOLOGY METALS AUSTRALIA | 0.185 | $16,197,521.00 | -71 | -12 |
| MLL | MALI LITHIUM | 0.105 | $29,096,112.00 | -67 | -12 |
| AXE | ARCHER EXPLORATION | 0.12 | $21,680,096.00 | 25 | -12 |
| MCT | METALICITY | 0.007 | $4,370,957.50 | -59 | -13 |
| HIP | HIPO RESOURCES | 0.007 | $2,705,573.25 | -63 | -13 |
| BSX | BLACKSTONE MINERALS | 0.11 | $16,095,477.00 | -26 | -13 |
| OMH | OM HOLDINGS | 0.62 | $465,332,704.00 | -51 | -13 |
| GXY | GALAXY RESOURCES | 1.16 | $460,510,144.00 | -60 | -13 |
| HWK | HAWKSTONE MINING | 0.013 | $8,974,134.00 | -62 | -13 |
| SRK | STRIKE RESOURCES | 0.052 | $8,690,982.00 | -4 | -13 |
| LML | LINCOLN MINERALS | 0.006 | $3,449,902.00 | -77 | -14 |
| SBR | SABRE RESOURCES | 0.006 | $2,852,302.00 | -54 | -14 |
| ORE | OROCOBRE | 2.51 | $625,410,624.00 | -42 | -15 |
| BAT | BATTERY MINERALS | 0.011 | $14,499,007.00 | -63 | -15 |
| VMC | VENUS METALS | 0.215 | $25,634,742.00 | 61 | -17 |
| SVD | SCANDIVANADIUM | 0.009 | $3,166,795.00 | -64 | -18 |
| RLC | REEDY LAGOON | 0.004 | $1,609,086.88 | -67 | -20 |
| TAR | TARUGA MINERALS | 0.024 | $3,388,013.75 | -82 | -20 |
| CFE | CAPE LAMBERT RESOURCES | 0.007 | $7,210,069.00 | -71 | -22 |
| EMH | EUROPEAN METALS | 0.31 | $44,725,880.00 | -20 | -23 |
| LI3 | LITHIUM CONSOLIDATED | 0.052 | $4,951,911.50 | -58 | -25 |
| SRN | SUREFIRE RESOURCES | 0.0065 | $3,018,921.75 | -45 | -25 |
| CZN | CORAZON MINING | 0.002 | $3,261,377.25 | -78 | -33 |
