High Voltage: Tesla ditches nickel and cobalt, spotlight on Pilbara Minerals’ third spodumene auction
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, and vanadium.
Unofficially scheduled for Tuesday October 26 is Pilbara Minerals’ (ASX:PLS) third auction on the Battery Material Exchange (BMX) digital platform for 10,000t (SC5.2%) spodumene.
The second auction went off at an incredible $US2,440/t, singlehandedly sparking a historic 86.5% month-on-month increase for average spod pricing industry-wide.
Susan Zou, non-ferrous editor at Fastmarkets, says bids for the upcoming coming auction “will not be as aggressive”.
“While the market consensus is that spodumene tightness will not ease significantly in the short term – despite Pilbara Minerals now producing spodumene from the restarted former Altura lithium project – the bids for the upcoming auction will not be as aggressive as last time because the ascent of lithium prices in China has slowed after the week-long national holiday compared with September, while the shipment time is months away,” Zou said.
Tesla posted record revenue and profits in third quarter.
Improved gross margins of 30.5% on its automotive business are an industry benchmark, but Tesla reckons it can do better.
Amid rising material costs, Tesla will switch all its standard range vehicles to lithium iron phosphate based (LFP) batteries.
LFP-based lithium-ion batteries are cheaper and safer than chemistries that use nickel and cobalt, but less energy dense.
— Joe Lowry (@globallithium) October 21, 2021
The switch comes as lithium-ion battery chemical prices are on the rise.
Argus says its minimum 22% nickel sulphate assessment rose by 31% in the last six months to $US4,450-4,650 per tonne today.
Meanwhile, prices for minimum 20.5% cobalt sulphate have increased by 23% over the same period to $US5.59-5.77/lb.
China’s ongoing energy shortage has begun to affect domestic battery materials production, with several companies forced to scale back anode and cathode production in late Q3, according to Benchmark Mineral Intelligence.
China is grappling with a shortage of coal – which fuels most of its electricity supply – due in part to its trade war with Australia.
“During China’s National Energy Commission meeting in mid-October, Premier Keqiang Li emphasised that extreme electricity cuts need to be corrected to ensure that the northern regions have secure usage of electricity for the winter, signifying that electricity restrictions within China might be relaxed at some stage in Q4,” Benchmark says.
“In the long-term, China seeks to guarantee resource security by addressing the structural issues behind the current electricity supply shortage.
“The government is pushing for an upgrade in coal-powered electricity infrastructure, diversification of energy sources, and mass adoption of energy storage technologies.”
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, and vanadium are performing>>>
The recently rebranded lithium play is now up 94% over the past five days on no news.
In response to a recent price query from the ASX, AZL also noted that lithium carbonate prices in China are trading at record highs in October.
The $163m market cap stock has gained an impressive ~850% year-to-date.
Gold focused QX has officially acquired a lithium project in the Pilbara, the hard rock capital of the world.
The explorer exercised an option to buy the ‘Turner River’ lithium project early, in advance of the due diligence period lapsing.
This reflects QXR’s confidence in the project’s prospectivity, QXR says.
It will also acquire the adjoining tenements for an extra $6000, which brings the total tenement position at Turner River from 45sqkm to 84sqkm.
“Following the recent site visit and after further reviews of the project’s geology and the surrounding prospects, we have taken the decision to not only exercise the Turner River option early but to expand our tenement holdings in the area by applying for some adjoining ground which looks equally as prospective,” QXR chairman Maurice Feilich says.
That recent site visit identified contained “numerous pegmatite dykes”. Encouraging start.
“Further site visits are planned, and we look forward to keeping shareholders updated on progress here and with respect to the ongoing work in Queensland,” Feilich says.