High Voltage: The lithium supply squeeze will push carbonate prices above $US40k. Here’s why

Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, and vanadium.

Prices for lithium carbonate have just reached new highs on the back of limited supply and sustained lithium-ion battery demand in China, Benchmark Mineral Intelligence says.

Benchmark’s EXW China (battery) grade of lithium carbonate rose by 26.5% to RMB 160,000/tonne ($24,800) in the final two weeks of September 2021.

This surpasses the previous high of $24,750/tonne for battery grade lithium carbonate assessed on 30 March 2018 “and marks a new era for the lithium industry”, Benchmark says.

But this parabolic move is just getting started, according to Benchmark boss Simons Moores.

Strap in for 2022 and beyond.

Certain grades of lithium are in shortage. Prices of lithium carbonate now at all time highs & rising ⁦@benchmarkmin⁩

Yet global 2021 market – pretty balanced. Next year is when shortage really hits

Lithium Rollercoaster 2.0 is just getting started https://t.co/R1wfLw7ucu

— Simon Moores (@sdmoores) October 9, 2021

In 2019, Moores said he was asked whether lithium prices in the next price surge would ever reach the highs of 2016.

“My response was this time it would be more aggressive,” he said in this tweet.

“Instead of the late 20s, prices in China would exceed $40,000/t.”

Here are three reasons why.

1.“This time there are more buyers than in 2016,” Moores says. “There are still not enough sellers: miners, refiners. Demand for lithium is outstripping the rate supply is growing by double. The wall of EV demand for lithium continued to build, esp 2026 and beyond.”

2. “Right now, the lithium industry is responding in real time, in many ways, and isn’t addressing a massive demand issue that we face towards the latter end of the decade,” Moores says. “For this massive investment would be needed or DLE [direct lithium extraction] breakthroughs to help close the supply demand gap.”

3. “Lithium carbonate price today in China is $28k tonne high end, mid-point $24k,” Moores says. “This is the top end of what we experienced 4/5 years ago and there’s a long way to go before this price surge runs out of steam … I don’t feel we are even halfway through yet.”

Here’s how a basket of ASX battery metals stocks are performing:

>>>lithium, cobalt, graphite, nickel, rare earths, or vanadium stocks missing from our list? Email [email protected]

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

CODE	COMPANY	1 WEEK RETURN %	1 MONTH RETURN %	6 MONTH RETURN %	1 YEAR RETURN %	PRICE	MARKET CAP
MLS	Metals Australia	100	0	0	-20	0.002	$ 10,477,114.72
VR8	Vanadium Resources	30	38	38	207	0.083	$ 29,291,087.35
STK	Strickland Metals	20	82	260	-12	0.071	$ 74,127,684.27
POS	Poseidon Nick	14	-9	75	72	0.105	$ 303,331,993.07
JRV	Jervois Global	13	11	23	108	0.56	$ 863,613,761.34
BSX	Blackstone	12	6	33	4	0.505	$ 165,497,612.15
GED	Golden Deeps	10	-8	-8	-21	0.011	$ 8,922,291.56
GME	GME Resources	10	17	14	59	0.068	$ 38,609,399.53
GBR	Greatbould Resources	9	9	400	144	0.175	$ 58,943,908.49
MAN	Mandrake Res	9	7	-60	5	0.062	$ 28,647,034.20
LTR	Liontown Resources	8	44	264	653	1.47	$ 2,723,429,194.35
CLA	Celsius Resource	8	-7	-32	-16	0.026	$ 27,227,930.11
BOA	Boadicea Resources	8	5	-7	-29	0.195	$ 15,151,479.53
PGM	Platina Resources	8	-7	19	45	0.068	$ 28,669,234.57
FFX	Firefinch	8	1	176	285	0.635	$ 511,737,358.73
MIN	Mineral Resources.	8	-13	9	76	44.88	$ 8,214,984,178.50
LPD	Lepidico	7	-6	-2	181	0.0225	$ 135,347,658.56
ATM	Aneka Tambang	7	7	7	7	1.07	$ 1,394,904.43
MCR	Mincor Resources NL	7	3	38	58	1.355	$ 627,186,409.85
IPT	Impact Minerals	7	33	-27	-38	0.016	$ 32,380,718.70
NIC	Nickel Mines Limited	6	-3	-30	27	0.965	$ 2,364,127,307.94
HAS	Hastings Tech Met	6	21	33	86	0.26	$ 451,998,541.28
CTM	Centaurus Metals	6	1	46	71	1.045	$ 340,291,761.48
GLN	Galan Lithium	6	0	65	587	1.03	$ 256,612,672.89
FGR	First Graphene	6	-3	-14	27	0.19	$ 99,021,777.48
OZL	OZ Minerals	5	-2	-6	59	22.95	$ 7,513,909,991.96
PAN	Panoramic Resources	5	5	26	105	0.215	$ 410,182,800.80
CXO	Core Lithium	6	28	87	798	0.44	$ 634,643,070.48
REE	Rarex Limited	5	-2	-11	-40	0.1025	$ 45,159,320.40
HXG	Hexagon Energy	4	-4	-30	57	0.077	$ 32,112,995.54
IGO	IGO Limited	4	-6	33	103	8.92	$ 6,641,238,720.01
AML	Aeon Metals .	4	2	-39	-54	0.057	$ 49,135,028.34
KNI	Kunikolimited	3	27			2.1	$ 80,455,804.16
MRC	Mineral Commodities	3	-3	-50	-53	0.15	$ 80,248,595.10
ARL	Ardea Resources	3	-1	-8	-13	0.455	$ 61,425,227.46
SYR	Syrah Resources	3	-18	-1	121	1.07	$ 518,684,111.92
BHP	BHP Group Limited	3	-9	-19	4	38.05	$ 111,342,487,609.56
NWC	New World Resources	3	-1	-34	86	0.069	$ 106,295,915.13
EMH	European Metals Hldg	3	-9	-9	210	1.38	$ 174,323,233.10
SGQ	St George Min	3	4	-8	-33	0.07	$ 41,832,556.53
CHN	Chalice Mining	3	-16	1	131	6.23	$ 2,212,922,388.60
ORE	Orocobre Limited	3	-10	59	201	8.55	$ 5,285,087,107.94
NTU	Northern Min	2	5	5	13	0.045	$ 217,877,083.47
AVL	Aust Vanadium	2	2	-6	73	0.0225	$ 72,178,160.58
G88	Golden Mile Res	2	-21	-58	-20	0.048	$ 8,037,861.42
VML	Vital Metals Limited	2	-9	-24	69	0.059	$ 237,432,535.79
AZS	Azure Minerals	2	-16	-24	34	0.315	$ 96,018,073.51
BMM	Balkanminingandmin	1	-17			0.7	$ 22,425,000.00
AGY	Argosy Minerals	1	10	107	244	0.1925	$ 237,551,623.76
PLS	Pilbara Min	1	-10	68	469	1.96	$ 5,768,642,606.60
S2R	S2 Resources	1	-22	-42	-67	0.09	$ 32,073,736.95
JRL	Jindalee Resources	1	-35	21	273	2.22	$ 121,396,423.50
LYC	Lynas Rare Earths	1	-7	1	143	6.555	$ 5,874,699,216.54
PLL	Piedmont Lithium Inc	1	-3	-19	21	0.73	$ 429,771,204.50
AQD	Ausquest Limited	0	-15	-11	-41	0.017	$ 13,171,037.30
WKT	Walkabout Resources	0	-5	11	-2	0.2	$ 85,081,345.40
ARU	Arafura Resource	0	39	16	124	0.215	$ 325,488,939.72
RXL	Rox Resources	0	-8	-32	-60	0.38	$ 59,890,893.32
NKL	Nickelx	0	-23			0.17	$ 9,095,000.00
AUZ	Australian Mines	0	-8	10	68	0.023	$ 98,981,859.62
LML	Lincoln Minerals	0	0	0	0	0.008	$ 4,599,869.49
AJM	Altura Mining	0	0	0	0	0.07	$ 209,037,029.25
VMC	Venus Metals Cor	0	12	3	-32	0.19	$ 28,704,949.77
CZN	Corazon	0	-8	-31	-15	0.034	$ 8,883,614.85
RFR	Rafaella Resources	0	-11	-30	-9	0.08	$ 15,259,393.44
TKL	Traka Resources	0	-7	-35	-35	0.013	$ 8,087,402.62
SBR	Sabre Resources	0	25	-29	-44	0.005	$ 8,446,568.25
RLC	Reedy Lagoon Corp.	0	-8	0	77	0.023	$ 11,880,575.65
INF	Infinity Lithium	0	28	-37	30	0.12	$ 46,335,173.94
NMT	Neometals	-1	6	118	348	0.85	$ 449,668,644.72
GL1	Globallith	-1	5			0.39	$ 34,255,719.96
MNS	Magnis Energy Tech	-2	-11	-2	68	0.32	$ 292,771,881.99
COB	Cobalt Blue	-2	2	-17	248	0.32	$ 86,564,085.63
SRI	Sipa Resources	-2	-8	-15	-31	0.055	$ 10,617,222.04
BEM	Blackearth Minerals	-2	-2	-18	155	0.1275	$ 26,087,432.04
RNU	Renascor Res	-2	6	16	1059	0.1275	$ 226,382,530.08
GAL	Galileo Mining	-2	-15	4	-2	0.25	$ 42,025,301.25
LIT	Lithium Australia NL	-2	-6	2	121	0.1125	$ 114,897,835.61
SRL	Sunrise	-2	-8	-32	-42	1.6	$ 143,192,027.61
IXR	Ionic Rare Earths	-3	3	-40	89	0.034	$ 115,341,583.48
AOU	Auroch Minerals	-3	-6	-33	104	0.165	$ 48,980,345.87
ESS	Essential Metals	-3	-16	48	48	0.155	$ 38,019,195.84
PRL	Province Resources	-3	0	-3	1315	0.15	$ 163,800,672.60
MLX	Metals X Limited	-3	18	54	370	0.3475	$ 313,006,793.12
ASN	Anson Resources	-3	-15	6	124	0.083	$ 83,479,240.74
QPM	Queensland Pacific	-4	16	171	650	0.255	$ 338,903,282.75
TLG	Talga Group	-4	-4	-7	77	1.375	$ 419,973,419.81
TMT	Technology Metals	-4	-14	-4	30	0.37	$ 69,017,976.27
BUX	Buxton Resources	-4	-12	-7	-23	0.065	$ 8,843,603.08
AZL	Arizona Lithium	-5	3	-2	215	0.041	$ 73,953,310.53
SLZ	Sultan Resources	-5	19	-10	-20	0.185	$ 13,211,533.91
BKT	Black Rock Mining	-5	-5	38	227	0.18	$ 157,467,972.37
TON	Triton Min	-6	6	-25	-35	0.033	$ 36,302,978.14
TNG	TNG Limited	-6	-6	-20	-29	0.08	$ 103,708,254.32
PNN	PepinNini Minerals	-6	30	26	144	0.39	$ 17,865,901.17
MOH	Moho Resources	-6	-2	-24	-43	0.06	$ 6,196,524.12
LEG	Legend Mining	-7	-5	-45	-49	0.071	$ 195,614,636.19
GW1	Greenwing Resources	-7	-21	-44	87	0.28	$ 31,239,562.20
EGR	Ecograf Limited	-7	-29	2	223	0.63	$ 281,208,411.88
PAM	Pan Asia Metals	-7	-31	163	110	0.42	$ 30,936,630.48
BRB	Breaker Res NL	-7	6	29	20	0.27	$ 92,864,664.77
ALY	Alchemy Resource	-7	-13	-19	-28	0.013	$ 8,739,164.89
LKE	Lake Resources	-7	1	71	693	0.5475	$ 626,420,198.16
CWX	Carawine Resources	-7	-7	-28	-19	0.19	$ 19,600,182.36
INR	Ioneer	-8	-10	70	205	0.595	$ 1,123,476,171.59
ADV	Ardiden	-8	-27	-39	-52	0.011	$ 23,686,688.92
ARR	American Rare Earths	-9	8	80	11	0.1725	$ 62,065,498.68
VRC	Volt Resources	-9	-17	81	142	0.029	$ 76,785,537.50
LPI	Lithium Pwr Int	-9	0	4	49	0.29	$ 97,655,557.44
ESR	Estrella Res	-9	-18	-40	-58	0.0335	$ 39,509,487.16
DEV	Devex Resources	-10	-11	12	-5	0.285	$ 86,193,510.76
VUL	Vulcan Energy	-10	-19	85	836	11.56	$ 1,443,720,170.72
AAJ	Aruma Resources	-10	-19	16	-24	0.08	$ 10,076,920.24
ARN	Aldoro Resources	-10	-21	8	375	0.385	$ 34,039,231.77
PUR	Pursuit Minerals	-12	-21	-56	297	0.037	$ 31,858,473.14
PEK	Peak Resources	-12	-9	-18	111	0.08	$ 159,029,396.88
CHR	Charger Metals	-12	-28			0.435	$ 14,093,655.40
SYA	Sayona Mining	-13	2	292	1647	0.1525	$ 954,541,644.76
EUR	European Lithium	-13	6	52	86	0.091	$ 99,046,446.78
CNJ	Conico	-14	-33	19	139	0.043	$ 43,009,239.58
AVZ	AVZ Minerals	-15	12	57	272	0.29	$ 981,542,667.40
HNR	Hannans	-15	314	263	383	0.029	$ 68,439,338.57
BAR	Barra Resources	-15	-12	21	0	0.023	$ 18,987,300.31
ADD	Adavale Resource	-15	-4	10	77	0.055	$ 16,125,647.16
AXE	Archer Materials	-16	-14	62	189	1.46	$ 350,503,262.91
PSC	Prospect Res	-17	0	76	106	0.36	$ 151,491,796.33
QXR	Qx Resources Limited	-18	-7	-13	-7	0.014	$ 9,662,253.65

Small Cap Standouts

VANADIUM RESOURCES (ASX:VR8)

This South Africa based vanadium project developer has scored a $4.6m investment at 10.4c per share – a massive 64% premium to the 30-day average share price (VWAP).

The cash comes from Raubex (JSE:RBX), an international infrastructure development, mining services and materials supply group.

A separate agreement would also see Raubex subsidiary ‘SPH Kundalila’ provide contract mining services to VR8.

With $6.1m in the bank, VR8 is now fully funded through definitive feasibility studies (DFS) and up to Final Investment Decision at the flagship ‘Steelpoortdrift’ vanadium project.

Steelpoortdrift is one of the world’s largest deposits, located within the famous, vanadium-rich Bushveld Complex.

A recent pre-feasibility study indicates the Steelpoortdrift project “is well positioned to become a significant high volume and low-cost producer”.

POSEIDON NICKEL (ASX:POS)

POS has several “capital-efficient” options for restarting production next year at its Black Swan nickel project in WA, according to MST Access senior research analyst Michael Bentley.

The most economically attractive option for the company is to refurbish the 1.1-million-tonne-per-annum capacity processing circuit and “fill the mill” to maximise nickel production, Bentley says.

A final investment decision is slated for May 2022, with first concentrate production targeted for December the same year.

“Our valuation remains at A$0.21 and is based on the restart of Black Swan,” Bentley said in a recent research update on Poseidon.

“We are yet to incorporate the full Golden Swan resource, Silver Swan tailings or Silver Swan infill into our valuation as we await the announcement of the Golden Swan resource.

“We see further upside from these additions.”