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High Voltage: Miners win, lithium-ion battery makers lose when metal prices go stratospheric
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- For the first time in the Gigafactory era battery prices are increasing, following a period of consistent raw material price rises throughout 2021
- Lithium carbonate price rises could dent emerging LFP battery sector
- Graphite prices ‘the highest they have been for many years’: Roskill
Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, and vanadium.
Red hot raw materials prices = more expensive batteries
For years, battery pack prices have been falling as global battery makers scale up and get more efficient.
Now — for the first time in the Gigafactory era — prices are increasing following a period of consistent raw material price rises throughout 2021, particularly for lithium.
“Several of China’s major lithium-ion battery makers have written to customers setting out intentions of new pricing structures, citing the rise in cathode and anode raw material prices as well as higher costs more generally, including for non-active materials such as PVDF binder, foils, and energy,” Benchmark Mineral Intelligence says.
“Lithium carbonate has been singled out as a major driver behind the battery cell price increases.
“Benchmark’s Lithium Carbonate Price EXW China (battery) has increased 313.33% since this time last year, reaching RMB 185,000/tonne ($28,675) in mid-October. Lithium carbonate prices are presently at all-time highs and set to continue on their upward trajectory as demand continues to outstrip supply.”
Carbonate prices could dent emerging LFP battery sector
News of electric vehicle (EV) producer Tesla’s higher adoption of lithium iron phosphate (LFP) batteries, costlier feedstock, and monthly restocking in China have all contributed to the strength of lithium carbonate prices across the board in Asia.
Sentiment toward lithium carbonate improved after Tesla said it would adopt LFP batteries on all its standard-range models globally, Fastmarkets says.
“That said, some market participants have raised concerns over the rapidly rising prices for lithium carbonate, which will eat up the margins of LFP battery manufacturers and force them to slow the pace of their production ramp-up, which in turn might weigh on the market,” it says.
“On the other hand, lithium carbonate producers raised their offers due to elevated purchasing costs for spodumene, while market participants acknowledged that the pressure on lithium carbonate producers might be higher compared with those on lithium hydroxide producers given that the former need to use more spodumene in the production process.”
The 3rd @PilbaraMineralsauction on the Battery Material Exchange (BMX) digital platform for 10,000t (SC5.5%) #lithium spodumene went off at a record $US2,350/t. #ASX $PLS https://t.co/cX090fSfrn
— Stockhead (@StockheadAU) October 27, 2021
A Fastmarkets source in China said that to produce one tonne of battery-grade lithium carbonate, approximately 7.8 tonnes of spodumene are needed. This compares with about 7 tonnes for lithium hydroxide.
Graphite prices ‘the highest they have been for many years’: Roskill
It’s not just lithium going stratospheric. Chinese graphite prices continue to rise as producers contend with a ‘perfect storm’ of increasing electricity costs and supply disruption caused by limits on energy consumption and shipping constraints, Roskill says.
“Battery grades are particularly affected as both the manufacture of synthetic graphite and the processing of spherical graphite from natural flake are known for their high levels of energy consumption,” Roskill says.
“Demand is growing rapidly for both natural and synthetic graphite in batteries as the EV sector recovers quickly from the pandemic, compounding issues of reduced supply.
“Prices could rise higher in Q4 if producers aren’t able to build up stocks now, ahead of typical winter closures.”
Graphite shipments also continue to be impacted by limited access to containers and vessels, adding to the problem.
Last week, Syrah Resources (ASX:SYR) reported Q3 production from Mozambique had been constrained by disruption in the global container shipping market. The company reported its production in Mozambique as 25kt in Q3, down from 29kt in Q2.
Prior to COVID-19, Syrah was the largest producer ex-China, and it is looking to regain market share following reopening of the ‘Balama’ mine in Q1.
“Total output for 2021 is likely to rival the next-largest ex-China producer, National de Grafite in Brazil,” Roskill says.
“Syrah Resources is expected to continue increasing output into Q4, having reported 50kt of natural graphite sales orders in Q3.”
The $623m market cap stock is up 24% to $1.24 per share in 2021 — well below the $4.69 per share peak in early 2018.
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, and vanadium are performing>>>
| CODE | COMPANY | 1 WEEK RETURN % | 1 MONTH RETURN % | 6 MONTH RETURN % | 1 YEAR RETURN % | SHARE PRICE [INTRADAY MON] | MARKET CAP |
|---|---|---|---|---|---|---|---|
| S2R | S2 Resources | 91 | 91 | 3 | -36 | 0.17 | $ 60,583,725.35 |
| GL1 | Globallith | 46 | 60 | 0.615 | $ 43,153,309.56 | ||
| BUX | Buxton Resources | 41 | 47 | 37 | 47 | 0.097 | $ 12,789,210.61 |
| ARN | Aldoro Resources | 30 | 22 | 35 | 206 | 0.535 | $ 46,912,202.17 |
| EUR | European Lithium | 29 | 29 | 111 | 221 | 0.135 | $ 143,260,056.54 |
| GLN | Galan Lithium | 27 | 47 | 72 | 1044 | 1.43 | $ 364,333,370.94 |
| MNS | Magnis Energy Tech | 22 | 52 | 25 | 135 | 0.47 | $ 422,892,718.43 |
| ASN | Anson Resources | 21 | 25 | 45 | 271 | 0.1075 | $ 99,380,048.50 |
| INF | Infinity Lithium | 20 | 75 | 11 | 136 | 0.21 | $ 80,514,027.56 |
| AGY | Argosy Minerals | 18 | 74 | 217 | 490 | 0.295 | $ 362,578,794.16 |
| HNR | Hannans | 18 | 19 | 406 | 575 | 0.04 | $ 84,959,178.91 |
| LPD | Lepidico | 17 | 39 | 61 | 281 | 0.0305 | $ 190,725,634.30 |
| AVZ | AVZ Minerals | 17 | 9 | 111 | 387 | 0.38 | $ 1,142,451,301.40 |
| RMX | Red Mount Min | 17 | 17 | 5 | -34 | 0.0105 | $ 14,644,583.02 |
| ESS | Essential Metals | 16 | 30 | 126 | 134 | 0.215 | $ 46,335,894.93 |
| NMT | Neometals | 16 | 16 | 95 | 454 | 1 | $ 567,569,569.86 |
| GW1 | Greenwing Resources | 16 | 10 | -11 | 123 | 0.335 | $ 37,375,904.78 |
| AZL | Arizona Lithium | 14 | 123 | 129 | 554 | 0.0915 | $ 155,032,990.01 |
| TNG | TNG Limited | 14 | 52 | 25 | 14 | 0.12 | $ 162,434,615.20 |
| LTR | Liontown Resources | 13 | 32 | 435 | 792 | 1.9 | $ 3,631,238,925.80 |
| CAE | Cannindah Resources | 13 | 83 | 290 | 960 | 0.265 | $ 145,286,954.68 |
| LEL | Lithenergy | 13 | 25 | 0.755 | $ 32,850,000.00 | ||
| AZS | Azure Minerals | 12 | 32 | 19 | 21 | 0.41 | $ 128,540,324.22 |
| CHR | Charger Metals | 12 | -6 | 0.46 | $ 13,773,345.05 | ||
| SYR | Syrah Resources | 12 | 19 | 1 | 179 | 1.2575 | $ 625,912,077.37 |
| HXG | Hexagon Energy | 12 | 22 | -37 | 96 | 0.094 | $ 38,803,202.95 |
| VMC | Venus Metals Cor | 12 | 0 | 6 | -21 | 0.19 | $ 28,704,949.77 |
| PUR | Pursuit Minerals | 12 | -14 | -42 | 217 | 0.038 | $ 31,858,473.14 |
| RLC | Reedy Lagoon Corp. | 11 | 15 | 43 | 173 | 0.03 | $ 15,660,758.81 |
| PNN | PepinNini Minerals | 11 | 17 | 104 | 132 | 0.51 | $ 23,527,979.29 |
| BRB | Breaker Res NL | 11 | 36 | 71 | 95 | 0.36 | $ 117,302,734.44 |
| IPT | Impact Minerals | 11 | -3 | -18 | -26 | 0.0155 | $ 28,333,128.87 |
| LYC | Lynas Rare Earths | 10 | 13 | 37 | 166 | 7.515 | $ 6,614,676,690.82 |
| JRL | Jindalee Resources | 10 | 14 | -11 | 251 | 2.6 | $ 140,129,271.94 |
| TON | Triton Min | 9 | -5 | -15 | -22 | 0.035 | $ 38,571,914.28 |
| PLS | Pilbara Min | 9 | 15 | 91 | 468 | 2.275 | $ 6,532,429,604.80 |
| LPI | Lithium Pwr Int | 8 | 58 | 67 | 157 | 0.475 | $ 149,971,034.64 |
| LKE | Lake Resources | 7 | 65 | 189 | 1605 | 0.955 | $ 1,125,050,456.72 |
| NTU | Northern Min | 7 | 22 | 25 | 54 | 0.0525 | $ 256,917,922.20 |
| MRD | Mount Ridley Mines | 7 | 7 | 7 | 200 | 0.0075 | $ 42,049,825.35 |
| PVW | PVW Res | 7 | 141 | 213 | 213 | 0.47 | $ 31,172,343.75 |
| COB | Cobalt Blue | 6 | 36 | 18 | 358 | 0.435 | $ 129,846,128.45 |
| INR | Ioneer | 7 | 13 | 77 | 297 | 0.735 | $ 1,404,290,855.46 |
| SRI | Sipa Resources | 5 | -3 | -17 | -24 | 0.058 | $ 11,842,286.13 |
| CNJ | Conico | 5 | -7 | 11 | 29 | 0.04 | $ 39,008,380.09 |
| AR3 | Austrare | 4 | -15 | 0.845 | $ 38,737,577.86 | ||
| BEM | Blackearth Minerals | 4 | -4 | -11 | 155 | 0.125 | $ 26,087,432.04 |
| GED | Golden Deeps | 4 | 25 | 14 | -17 | 0.0125 | $ 9,310,217.28 |
| FRS | Forrestaniaresources | 4 | 93 | 0.385 | $ 10,238,250.00 | ||
| IXR | Ionic Rare Earths | 4 | 16 | 7 | 238 | 0.0405 | $ 132,303,581.05 |
| PLL | Piedmont Lithium Inc | 4 | 20 | -16 | 154 | 0.825 | $ 474,667,196.00 |
| ORE | Orocobre Limited | 3 | 11 | 38 | 275 | 9.46 | $ 5,673,977,715.40 |
| MCR | Mincor Resources NL | 3 | 10 | 40 | 48 | 1.395 | $ 665,931,516.25 |
| NIC | Nickel Mines Limited | 3 | 19 | -6 | 17 | 1.085 | $ 2,628,205,358.30 |
| IGO | IGO Limited | 3 | 12 | 33 | 127 | 9.79 | $ 7,300,061,717.32 |
| RBX | Resource B | 3 | -7 | 488 | 488 | 0.2 | $ 8,388,992.85 |
| WKT | Walkabout Resources | 3 | 0 | -41 | 38 | 0.2 | $ 85,081,345.40 |
| BKT | Black Rock Mining | 2 | 13 | 63 | 307 | 0.22 | $ 178,770,890.13 |
| PAN | Panoramic Resources | 2 | 17 | 45 | 129 | 0.24 | $ 492,219,360.96 |
| LIT | Lithium Australia NL | 2 | 6 | 2 | 160 | 0.1275 | $ 125,008,233.00 |
| TLG | Talga Group | 2 | 7 | 3 | 35 | 1.55 | $ 454,844,859.00 |
| SRL | Sunrise | 1 | 25 | -7 | -24 | 1.99 | $ 171,560,259.50 |
| MIN | Mineral Resources. | 0 | -9 | -17 | 59 | 39.46 | $ 7,287,729,642.49 |
| MLS | Metals Australia | 0 | 0 | 0 | 0 | 0.002 | $ 10,477,114.72 |
| ARU | Arafura Resource | 0 | -12 | 16 | 119 | 0.215 | $ 340,988,413.04 |
| AJM | Altura Mining | 0 | 0 | 0 | 0 | 0.07 | $ 238,056,602.28 |
| LML | Lincoln Minerals | 0 | 0 | 0 | 0 | 0.008 | $ 4,599,869.49 |
| AQD | Ausquest Limited | 0 | 0 | -19 | -35 | 0.017 | $ 13,994,227.13 |
| MMC | Mitremining | 0 | 10 | 0.22 | $ 5,823,296.50 | ||
| ALY | Alchemy Resource | 0 | 2 | -22 | -30 | 0.013 | $ 10,923,956.10 |
| ATM | Aneka Tambang | 0 | 10 | 10 | 10 | 1.1 | $ 1,434,013.90 |
| RNU | Renascor Res | 0 | -7 | 59 | 1082 | 0.13 | $ 235,815,135.50 |
| AVL | Aust Vanadium | 0 | 0 | 4 | 140 | 0.024 | $ 78,739,811.54 |
| ADV | Ardiden | 0 | -8 | -15 | -73 | 0.011 | $ 23,686,688.92 |
| SBR | Sabre Resources | 0 | 0 | -17 | -29 | 0.005 | $ 8,446,568.25 |
| QEM | QEM Limited | 0 | 24 | -28 | 64 | 0.18 | $ 19,281,966.61 |
| CZN | Corazon | 0 | 14 | 11 | -33 | 0.04 | $ 9,898,885.11 |
| VIA | Viagold Rare Earth | 0 | 335 | 2339 | 10426 | 2 | $ 166,624,808.00 |
| EMH | European Metals Hldg | 0 | -6 | -2 | 199 | 1.315 | $ 174,323,233.10 |
| MLX | Metals X Limited | -1 | 1 | 60 | 371 | 0.3675 | $ 326,615,784.12 |
| OZL | OZ Minerals | -1 | 12 | 1 | 64 | 24.74 | $ 8,384,749,471.49 |
| HAS | Hastings Tech Met | -1 | -3 | 45 | 114 | 0.2675 | $ 460,690,820.92 |
| VR8 | Vanadium Resources | -1 | 25 | 52 | 182 | 0.079 | $ 36,551,315.05 |
| RFR | Rafaella Resources | -1 | -7 | -27 | -21 | 0.077 | $ 14,305,681.35 |
| ILU | Iluka Resources | -1 | 6 | 20 | 88 | 9.29 | $ 3,978,102,014.80 |
| HYM | Hyperion Metals | -2 | -10 | -8 | 228 | 0.985 | $ 139,112,491.00 |
| SYA | Sayona Mining | -2 | -10 | 315 | 1930 | 0.1575 | $ 1,098,775,818.08 |
| CHN | Chalice Mining | -2 | 7 | -3 | 148 | 6.76 | $ 2,354,097,660.60 |
| PRL | Province Resources | -2 | 2 | -29 | 1228 | 0.1525 | $ 175,097,270.71 |
| NKL | Nickelx | -2 | -19 | 0.1375 | $ 6,955,000.00 | ||
| AUZ | Australian Mines | -2 | 11 | 7 | 79 | 0.0245 | $ 103,285,418.74 |
| REE | Rarex Limited | -2 | -4 | -13 | -26 | 0.096 | $ 43,352,947.58 |
| ARR | American Rare Earths | -3 | -5 | 113 | 90 | 0.19 | $ 64,418,540.31 |
| RXL | Rox Resources | -3 | 4 | -34 | -55 | 0.375 | $ 61,466,969.46 |
| AXE | Archer Materials | -3 | -14 | 71 | 237 | 1.5 | $ 359,377,437.80 |
| SLZ | Sultan Resources | -3 | 0 | -13 | -36 | 0.175 | $ 12,516,190.02 |
| ESR | Estrella Res | -3 | -5 | -34 | -74 | 0.035 | $ 39,509,487.16 |
| CTM | Centaurus Metals | -3 | 12 | 58 | 101 | 1.085 | $ 367,790,085.64 |
| DEV | Devex Resources | -3 | -13 | 27 | 38 | 0.31 | $ 95,428,529.77 |
| MOH | Moho Resources | -3 | -3 | -19 | -45 | 0.061 | $ 6,299,799.52 |
| BHP | BHP Group Limited | -3 | 0 | -25 | 7 | 36.34 | $ 107,920,195,992.52 |
| MRC | Mineral Commodities | -3 | -3 | -40 | -57 | 0.14 | $ 74,898,688.76 |
| AAJ | Aruma Resources | -4 | -13 | 21 | -22 | 0.082 | $ 11,210,573.77 |
| BAR | Barra Resources | -4 | 0 | 32 | -22 | 0.025 | $ 19,778,437.83 |
| TMT | Technology Metals | -4 | -10 | 7 | 4 | 0.37 | $ 69,950,651.63 |
| EGR | Ecograf Limited | -4 | -12 | 6 | 307 | 0.61 | $ 274,459,409.99 |
| PGM | Platina Resources | -4 | 15 | -3 | 61 | 0.071 | $ 31,275,528.62 |
| PSC | Prospect Res | -4 | 4 | 207 | 291 | 0.43 | $ 161,079,884.70 |
| CWX | Carawine Resources | -5 | 3 | -28 | -37 | 0.205 | $ 22,322,429.91 |
| ARL | Ardea Resources | -5 | 10 | 3 | 6 | 0.505 | $ 67,636,767.31 |
| BOA | Boadicea Resources | -5 | 6 | -23 | -17 | 0.19 | $ 14,374,480.58 |
| QPM | Queensland Pacific | -5 | -17 | 69 | 532 | 0.2275 | $ 305,012,954.48 |
| FFX | Firefinch | -5 | 3 | 71 | 297 | 0.615 | $ 560,893,470.60 |
| BSX | Blackstone | -5 | 32 | 64 | 70 | 0.605 | $ 237,990,372.05 |
| G88 | Golden Mile Res | -6 | 7 | -47 | -20 | 0.049 | $ 8,379,898.07 |
| NVA | Nova Minerals | -6 | 16 | 0 | -19 | 0.145 | $ 270,305,633.55 |
| TKL | Traka Resources | -7 | 17 | -18 | -39 | 0.014 | $ 8,709,510.52 |
| STK | Strickland Metals | -7 | 44 | 257 | 5 | 0.082 | $ 90,838,475.10 |
| AML | Aeon Metals . | -7 | -7 | -32 | -61 | 0.051 | $ 44,824,938.13 |
| LOT | Lotus Resources | -8 | 22 | 126 | 251 | 0.305 | $ 305,455,211.15 |
| GAL | Galileo Mining | -8 | -8 | -13 | 0 | 0.23 | $ 38,663,277.15 |
| AOU | Auroch Minerals | -8 | -3 | -23 | 10 | 0.165 | $ 52,404,274.13 |
| SGQ | St George Min | -8 | -3 | -31 | -51 | 0.066 | $ 38,886,601.84 |
| VML | Vital Metals Limited | -8 | -4 | -11 | 93 | 0.054 | $ 224,936,086.54 |
| VUL | Vulcan Energy | -9 | -5 | 47 | 924 | 12.18 | $ 1,549,171,008.63 |
| JRV | Jervois Global | -9 | 10 | 27 | 108 | 0.54 | $ 863,613,761.34 |
| VRC | Volt Resources | -9 | -9 | 26 | 164 | 0.029 | $ 79,433,314.65 |
| GME | GME Resources | -9 | 3 | 10 | 64 | 0.067 | $ 41,579,353.34 |
| NWC | New World Resources | -10 | 4 | -35 | 71 | 0.072 | $ 118,987,964.70 |
| ADD | Adavale Resource | -10 | -18 | -18 | 66 | 0.053 | $ 17,601,731.19 |
| CLA | Celsius Resource | -10 | 0 | -41 | -16 | 0.026 | $ 28,275,158.19 |
| POS | Poseidon Nick | -10 | 2 | 42 | 45 | 0.094 | $ 284,948,235.92 |
| CXO | Core Lithium | -11 | 42 | 95 | 1133 | 0.555 | $ 943,585,764.54 |
| A8G | Australasian Gold | -11 | 43 | 0.615 | $ 25,656,673.57 | ||
| PAM | Pan Asia Metals | -11 | 12 | 255 | 312 | 0.515 | $ 37,197,615.22 |
| FGR | First Graphene | -11 | 8 | -24 | 30 | 0.195 | $ 104,522,987.34 |
| MAN | Mandrake Res | -12 | 14 | -72 | 5 | 0.058 | $ 28,647,034.20 |
| LEG | Legend Mining | -13 | 7 | -52 | -52 | 0.065 | $ 187,349,229.03 |
| PEK | Peak Resources | -13 | -26 | -27 | 118 | 0.0675 | $ 141,138,589.73 |
| QXR | Qx Resources Limited | -17 | 92 | 47 | 25 | 0.025 | $ 16,959,058.03 |
| BMM | Balkanminingandmin | -18 | -22 | 0.585 | $ 18,525,000.00 | ||
| GBR | Greatbould Resources | -26 | -3 | 209 | 145 | 0.145 | $ 53,585,371.35 |
Weekly Small Cap Standouts
GLOBAL LITHIUM RESOURCES (ASX:GL1)
A “heavily overbid” $13.6m cap rise will fast track exploration at the Marble Bar Lithium Project (MBLP) in 2022, the Pilbara-based company says.
As part of the placement, Yibin Tianyi — the lithium chemical arm of world’s largest EV battery producer Contemporary Amperex Technology Co. (CATL) – will invest $6.2 million for a 9.9% interest in GL1.
Yibin Tianyi operates a 20ktpa lithium hydroxide plant and plans to commission a further 25ktpa of capacity by the end of 2021.
A further Stage 3 expansion for 110ktpa by the end of 2024 would make Yibin Tianyi one of the largest lithium chemical suppliers in China.
“To be able to secure support from a lithium industry participant with the credibility of Yibin Tianyi is a strong vote of confidence in our company and we look forward to developing our relationship with them over time,” GL1 managing director Jamie Wright says.
“The capital raising funds provide us with the ability to ramp up our activities on site as we seek to grow our project and we are looking forward to a busy 2022 period.
“Drilling is continuing at our MBLP and we will update the market as we start to receive results.”
The $49m market cap stock is up 180% on its May listing price of 20c per share.
$47m market cap ARN — which featured in our ‘forgotten resources stocks that could conceivably multi-bag’ series in October last year – is up ~200% year-to-date.
It has a bunch of battery metals/critical minerals projects covering lithium, nickel and ultra-rare rubidium – which can generate an astonishing $1.4-1.5 million per tonne.
(Rubidium — which is a pain in arse to process because ignites spontaneously when exposed to air and reacts violently with water – is used in vacuum tubes, the manufacture of photocells and in special glasses, and as a propellant in ion engines on spacecraft.)
Most recently, ARN hit 6.7m of “strong magmatic sulphides” at VC1, part of the Narndee nickel-PGE project in WA.
An RC rig has now been mobilised to the site to commence a grid-style drilling program over the southern portion of the VC1 target to achieve a JORC 2012 mineral resource.
Bonus fact: ARN is spinning out its gold assets into new IPO Aurum Resources (ASX:AUE), which should be listing on the ASX today. ARN will retain a 16.6% stake in the explorer.
