High Voltage: Spodumene prices ‘nothing to complain about’, says Pilbara Minerals boss
Link copied to
Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
2018 was tough for the lithium chemicals industry. Prices have stabilised since then, but Australian lithium miners are getting less cash for their spodumene as a result.
In a quarterly conference call, Pilbara Minerals (ASX:PLS) boss Ken Brinsden acknowledges the weaker market but maintains that current prices – he references $US742 ($1050) tonne — was “actually very strong pricing”.
“Pricing [has] obviously come off a high — but it’s nonetheless still a very strong price,” he says.
“There is nothing to complain about with respect to $US742 a ton. That will translate to very healthy spodumene business in Australia.”
These guys are still making profits, in other words.
Like last week, when lithium chemical producer Orocobre (ASX:ORE) announced a 20 per cent drop in March quarter cash margins.
In the meantime, Brinsden says, EV sales continue to grow very strongly around the world.
“And the net effect of that of course, is increasing demand, and another dynamic I would expect to come into play during 2019 is further exports from China of battery ready products,” he says.
Case in point; BYD, the world’s largest EV maker, reported a 632 per cent jump in profits in the March quarter compared to the March quarter last year.
The Chinese company said battery electric vehicle sales jumped 755 per cent, while oil-fuelled vehicle sales fell 46 per cent over the same period.
Following news that cobalt prices had rebounded for the first time in 5 months, BMW announced it would be bypassing the DRC — which controls more than two-thirds of supply — altogether.
The carmaker reckons the cobalt used in its next-generation electric vehicles will come from Australia and Morocco.
Carmakers are recognising they need to reduce long term price and supply risk for all critical battery minerals, says Caspar Rawles, cobalt analyst at Benchmark Minerals Intelligence.
It’s good news for non-DRC miners and advanced explorers; their supply will be in high demand from those automakers, like BMW, who are diversifying away from the DRC.
“Which of course will mean those producers should be able to achieve the higher end of prices (relative to the current market),” Rawles says.
Another reasonably quiet week for the small cap winners column — which reflects the current market more than anything — with most stocks on our list either treading water or losing ground.
Check it out:
The highlights came from manganese explorer Bryah Resources (ASX:BYH), graphite play Kibaran Resources (ASX:KNL), lithium explorer Dart Mining (ASX:DTM), and vanadium developers TNG (ASX:TNG) and Technology Metals (ASX:TMT).
Here’s a table of ASX battery metal stocks with exposure to lithium, cobalt, graphite, manganese and vanadium>>>
(Is there a small cap battery metals stock missing from our list? Drop us a line!)
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop.