Each fortnight our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, and vanadium.

Big project deferrals will just amplify the size and length of a lithium price rebound in ~2023 when supply struggles to maintain pace with battery demand growth, Benchmark says.

The coronavirus pandemic has disrupted almost every global supply chain in the truest sense of the word.

For the embryonic lithium-ion supply chain – which is truly global – that disruption has been most pronounced, says Benchmark Minerals Intelligence. It’s going to be a disappointing 2020.

What had been marked as a year that would take us into a new generation of EV expansions, now faces a more uncertain future – at least in the short-term,” Benchmark analyst George Miller says.

“Almost every section of this supply chain has been impacted in different ways, and to different extents. Those which have not will undoubtedly feel the effects in Q2.”

READ: The outlook for lithium demand in 2020 is looking pretty bleak, Orocobre reports

Benchmark now forecasts a lithium market surplus through to 2023; but then comes the sustained rally in pricing.

Miller says this rally will now be higher and longer as this prolonged period of low pricing impacts “availability of capital into the sector over the medium term”.

Even prior to the pandemic, lithium producers were ‘girding their loins’ by deferring unnecessary expenditure. That meant delaying production expansions.

“These [current] pressures will only serve to prolong a period of low-pricing and negative sentiment, that will put more obstacles in the way of developing new projects and increase the risk of supply chain bottlenecks in the years to come,” he says.

As challenging as it is, COVID-19 is an “anomalous event” which will not stop EV adoption in the medium to long term, says Wood Mackenzie.

“Automakers haven’t changed their carbon-neutral goals and we don’t expect governments to defer or cancel policies designed to phase out internal combustion engine (ICE) vehicles,” Wood Mac says.

“And while it’s tempting to think that the oil price crash is bad news for EV adoption, in reality the purchase price, charging infrastructure and available models currently have a much greater impact on sales.”

For a sense of the potential demand, under the Wood Mackenzie 2°C pathway battery manufacturing capacity must grow 10-fold to just under 3,000 gigawatt hours (GWh) in 2030.

If all currently planned manufacturing plants are constructed on schedule (“a big if,” Wood Mac says) the industry will still only grow to around 1,800GWh by 2030.

Less than half this 1,800GWh capacity has been financed right now which is where some fundamental issues emerge.

“Take the raw materials required for battery production,” Wood Mac says.

“The nickel industry would need to double, cobalt supply would need to grow five times its current size while lithium would need to [grow] nearly 12 times to meet the requisite demand.

“The lithium industry must add capacity equivalent to the size of the entire industry in 2019 every year for the next decade.

“Meanwhile, the nickel industry alone would require over US$100bn investment to build new capacity.”

For the next crop of producers that’s great news.

 

SMALL CAP FOCUS

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

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

CODE NAME SHARE PRICE [Intraday April 30] TOTAL FORTNIGHTLY RETURN % TOTAL YEARLY RETURN % MARKET CAP
SVD SCANDIVANADIUM 0.007 150 -42 $ 3,518,661.00
AML AEON METALS 0.094 78 -57 $ 65,046,692.00
TMT TECHNOLOGY METALS AUSTRALIA 0.135 71 -29 $ 12,828,805.00
BSM BASS METALS 0.004 67 -56 $ 14,049,373.00
MLL MALI LITHIUM 0.07 56 -50 $ 22,214,368.00
LML LINCOLN MINERALS 0.006 50 0 $ 3,449,902.00
CZN CORAZON MINING 0.003 50 0 $ 7,229,688.00
VR8 VANADIUM RESOURCES 0.018 42 -82 $ 6,362,716.50
PIO PIONEER RESOURCES 0.013 40 0 $ 21,122,622.00
ADV ARDIDEN 0.004 33 33 $ 7,154,081.00
EMH EUROPEAN METALS 0.22 33 -46 $ 25,797,186.00
TON TRITON MINERALS 0.03 26 -32 $ 32,899,202.00
WKT WALKABOUT RESOURCES 0.15 16 -38 $ 50,624,380.00
LTR LIONTOWN RESOURCES 0.105 15 289 $ 177,868,448.00
JRV JERVOIS MINING 0.195 15 -22 $ 121,910,208.00
BKT BLACK ROCK MINING 0.033 14 -56 $ 20,755,142.00
INR IONEER 0.1425 13 -27 $ 218,384,816.00
AVL AUSTRALIAN VANADIUM 0.009 13 -53 $ 23,051,906.00
AXE ARCHER MATERIALS 0.185 9 140 $ 38,235,524.00
TLG TALGA RESOURCES 0.34 9 -52 $ 75,531,232.00
PLL PIEDMONT LITHIUM 0.091 9 -30 $ 71,889,856.00
CLQ CLEAN TEQ HOLDINGS 0.205 5 -34 $ 145,559,744.00
AJM ALTURA MINING 0.049 4 -53 $ 127,500,360.00
TNG TNG 0.062 4 -48 $ 64,099,072.00
NMT NEOMETALS 0.165 3 -7 $ 87,122,704.00
LKE LAKE RESOURCES 0.04 3 -17 $ 25,515,554.00
AGY ARGOSY MINERALS 0.044 0 -40 $ 40,780,084.00
EUR EUROPEAN LITHIUM 0.046 0 -56 $ 29,204,984.00
AEE AURA ENERGY 0.003 0 -70 $ 5,960,316.50
BAR BARRA RESOURCES 0.019 0 -34 $ 8,351,220.50
CLA CELSIUS RESOURCES 0.01 0 -38 $ 7,572,181.00
PUR PURSUIT MINERALS 0.004 0 -83 $ 1,412,937.25
PM1 PURE MINERALS 0.011 0 -15 $ 6,557,889.50
MLS METALS AUSTRALIA 0.001 0 -33 $ 3,207,352.75
GME GME RESOURCES 0.04 0 -25 $ 20,249,716.00
JRL JINDALEE RESOURCES 0.32 0 5 $ 12,318,161.00
TKL TRAKA RESOURCES 0.004 0 -71 $ 1,601,851.88
RLC REEDY LAGOON 0.002 0 -60 $ 804,543.44
MIN MINERAL RESOURCES 16.6 -1 10 $ 3,058,865,408.00
AVZ AVZ MINERALS 0.059 -2 48 $ 142,200,384.00
GLN GALAN LITHIUM 0.155 -3 -40 $ 25,531,460.00
ORE OROCOBRE 2.21 -3 -34 $ 590,206,656.00
SYR SYRAH RESOURCES 0.235 -4 -78 $ 95,348,704.00
EGR ECOGRAF 0.063 -5 -48 $ 19,385,966.00
INF INFINITY LITHIUM 0.035 -5 -59 $ 8,356,855.00
GXY GALAXY RESOURCES 0.76 -6 -48 $ 303,014,720.00
BPL BROKEN HILL PROSPECTING 0.014 -7 -12 $ 3,562,046.00
PLS PILBARA MINERALS 0.2125 -7 -65 $ 466,977,920.00
CXO CORE LITHIUM 0.041 -7 -2 $ 31,700,980.00
FGR FIRST GRAPHENE 0.135 -7 -25 $ 61,759,112.00
ARL ARDEA RESOURCES 0.265 -9 -26 $ 29,325,108.00
COB COBALT BLUE 0.14 -10 3 $ 20,792,344.00
MNS MAGNIS ENERGY TECHNOLOGIES 0.05 -12 -81 $ 32,250,312.00
VUL VULCAN ENERGY RESOURCES 0.21 -13 31 $ 11,270,700.00
SYA SAYONA MINING 0.008 -13 -43 $ 17,282,710.00
CNJ CONICO 0.006 -14 -59 $ 2,306,389.25
LIT LITHIUM AUSTRALIA 0.046 -17 -40 $ 26,499,882.00
VRC VOLT RESOURCES 0.005 -17 -75 $ 8,694,184.00
AUZ AUSTRALIAN MINES 0.0095 -18 -59 $ 32,633,932.00
BEM BLACKEARTH MINERALS 0.029 -19 -52 $ 3,409,665.75
ASN ANSON RESOURCES 0.017 -19 -75 $ 10,199,350.00
LPI LITHIUM POWER INTERNATIONAL 0.135 -21 -41 $ 35,506,876.00
HIP HIPO RESOURCES 0.01 -23 0 $ 3,865,104.50
RNU RENASCOR RESOURCES 0.007 -25 -67 $ 7,908,909.50
GED GOLDEN DEEPS 0.005 -29 -82 $ 1,403,042.75
PSC PROSPECT RESOURCES 0.09 -35 -44 $ 23,331,216.00
LPD LEPIDICO 0.0075 -41 -79 $ 32,950,530.00
GPX GRAPHEX MINING 0.039 -48 -82.2727 $ 4,485,450.50