High Voltage: Finally, lithium stocks are back on the dias
Link copied to
Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel and vanadium.
In 2017, more than 100 ASX exploration stocks were chasing a lithium payday.
But then ‘an avalanche of supply’ led to plummeting prices, Macquarie and Morgan Stanley said ‘I told you so’, and investors bailed almost as quickly as they arrived.
Lithium explorers and miners — comprising a big chunk of 2017’s top performing stocks — have been pounded since that peak.
But in 2020, the battery metals ‘supply crunch’ is maturing into a much more tangible concept. Prices remain suppressed for now, but sentiment is finally improving.
In late September Tesla became the first automaker, but probably not the last, to vertically integrate into lithium conversion and production.
This plant will source its spodumene feedstock from advanced explorer Piedmont – a deal announcement which sent that stock through the proverbial roof.
Tesla is expected to source from other US-based concentrate suppliers, says Benchmark Mineral Intelligence.
That explains why fellow US-based lithium explorers, Jindalee and ioneer, also went on a run.
And then there’s Europe, where major battery cell manufacturers are planning numerous factories “in preparation for market growth in 2021 and beyond”, Benchmark says.
“With the combined cell capacity of these companies in 2020 estimated at 105 GWh, according to the Benchmark Megafactory Assessment – nearly 15 per cent of the market – these expansions alone would have the potential to significantly increase the demand for lithium products in the mid-term, further improving the demand outlook for the industry,” it says.
The number of lithium-focused stocks has dropped precipitously since 2017; and yet some of the top performing stocks over the past month are dominated by the stalwarts – Piedmont Lithium (ASX:PLL) +434%, ioneer (ASX:INR) +104%, Lake Resources (ASX:LKE) +88%, Vulcan Energy (ASX:VUL) +61%, Liontown Resources (ASX:LTR) +50%, and Jindalee Resources (ASX:JRL) +49%.
These explorers, the ones that continued to progress their projects during the ‘dark days’, are now in a pretty good spot.
Here’s how a basket of 105 ASX stocks with exposure to lithium, cobalt, graphite, nickel, and vanadium are performing>>>
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop: