Investor confidence could be returning to the beaten-up lithium small cap space — general market volatility aside — as metal prices stabilise and a slew of significant global announcements puts electric vehicle (EV) adoption on the fast track.

Over the last year just under 14 per cent of the lithium-facing  stocks on our list have made share price gains (see graph below).

But this has been trending up over the last month or so, and in the last fortnight more than 36 per cent had made share price gains (to Tuesday November 20).

The number of stocks moving into negative territory has also dropped significantly over this time.

Canaccord Genuity mining analyst Reg Spencer says lithium stocks had taken a beating this year because investors don’t understand the “depth and complexity” of the lithium supply chain.

The supply chain from “mine or brine to market” could take up to a year — and that was before potential bottlenecks in processing, he said.

Cannacord forecasts at least 400,000 tonnes a year of lithium will be needed for EV batteries by 2025.

Scroll down for a table showing the recent performance of lithium-facing ASX stocks >>>

lithium
The overall performance of ASX lithium stocks has improved over the last month.

 

“Now compared to the lithium market last year, which was approximately 200,000 tonnes — noting that global non-battery use of lithium was about 110,000 tonnes a year,” Mr Spencer said.

Canaccord has revised its own supply and demand forecasts five times since May 2016.

“The last time we revised those numbers in April this year, we now expect the market not to hit oversupply until 2020,” Mr Spencer said.

“But given all these risks to new supply availability, capital, and technical challenges, how confident can we be that we are going to see this oversupply?”

Roskill analyst David Merriman recently told Stockhead that lithium prices are expected to fall back slightly into 2019, before increasing towards the end of the year and beyond to support significant new supply.

Australian lithium producers are still making very healthy profit margins at current prices.

“Despite expansions at existing producers and the commissioning of new market entrants, supply will struggle to keep pace with rapid demand growth, driven by electrification of vehicles and energy storage during the early 2020s,” Mr Merriman says.

Source: Galaxy Resources.

Big announcements supercharge investor confidence

Volkswagen Group — which owns Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda and Volkswagen — recently announced it was going to spend more than $68.5 billion in the coming five years on EVs, autonomous driving, new mobility services and digitalisation.

Roskill battery analyst Jose Lazuen told Stockhead this announcement implies that the VW ID – Volkswagen’s first mass market competitor to the Tesla Model 3 — will start rolling-off the assembly line by 2022.

“This is exactly the year when we assume a real inflection point in EV demand — when EVs become truly affordable,” Lazuen says.

The 150GwH of battery capacity that VW says it will need by 2025 represents 11 per cent of global automotive lithium-ion demand by 2025.

According to Roskill modelling, this is “a realistic figure” for one of the world’s top 3 automakers.

VW’s announcement has been seen by some Wall Street analysts as a “no-way-back” strategy, Mr Lazuen says.

“VW has renounced its highly successful heritage of combustion vehicles in favour of an electrified future which, by the way, will be very dependent on Asian batteries,” he says.

To help reduce this dependence, Lazuen says German battery company Varta has announced future mass production of EV batteries alongside chemical giants BASF, carmaker Ford, and possibly VW — partially funded through a huge German government grant.

“This news is important because it helps us understand what the stakes are for the German auto-industry as a whole, and how they are mobilising to be able to compete with Asian battery and automakers in an electrified future,” he says.

“When you consider the pressure that EU emissions targets are putting on automakers (95g/Km of CO2 by 2020, and less than 60g/Km by 2030), then you understand that — as of today — there is simply no combustion car for sale that can comply with those targets.”

“When you think that countries like China, Japan and Korea have historically mirrored the EU emissions limits, then you understand that global automakers could eventually risk future sales if they don’t start preparing their vehicles for a future ultra-low-emissions scenario.”

Here’s a table of ASX lithium-facing ASX stocks  and their performance over time

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

ASX code Company Two-week price change One-month price change Six-month price One-year price change Price Nov 19 (intraday) Market Cap
BOA BOADICEA RESOURC 1 0.888888888889 0.172413793103 0.214285714286 0.17 7.9M
CUL CULLEN RES 0.421052631579 0.227272727273 -0.386363636364 -0.181818181818 0.027 3.0M
INF INFINITY LITHIUM 0.362068965517 0.362068965517 -0.112359550562 -0.561111111111 0.079 14.8M
DEV DEVEX RESOURCES 0.333333333333 0 -0.333333333333 -0.666666666667 0.004 4.4M
HNR HANNANS 0.272727272727 0.272727272727 -0.125 -0.263157894737 0.014 25.8M
TKM TREK METALS 0.2 -0.0769230769231 -0.4 -0.636363636364 0.012 3.7M
PSM PENINSULA MINES 0.2 0 -0.454545454545 -0.714285714286 0.006 5.2M
NVA NOVA MINERALS 0.2 0.0909090909091 -0.142857142857 0.6 0.024 19.5M
DHR DARK HORSE RESOU 0.2 0 -0.714285714286 -0.454545454545 0.006 11.9M
LKE LAKE RESOURCES 0.190476190476 0.453488372093 0.190476190476 -0.342105263158 0.125 46.8M
ORE OROCOBRE 0.17661097852 0.361878453039 -0.186468646865 -0.146468144044 4.93 1.2B
AEE AURA ENERGY 0.176470588235 0.0526315789474 -0.0909090909091 -0.166666666667 0.02 22.5M
CXO CORE LITHIUM 0.166666666667 0.12 0.037037037037 -0.253333333333 0.056 33.6M
ASN ANSON RESOURCES 0.166666666667 0.213333333333 0.978260869565 -0.208695652174 0.091 44.5M
PM1 PURE MINERALS 0.153846153846 0.0714285714286 -0.0625 -0.4 0.015 4.4M
LTR LIONTOWN RESOURC 0.142857142857 -0.04 -0.142857142857 -0.04 0.024 25.9M
AGY ARGOSY MINERALS 0.119047619048 0.119047619048 -0.229508196721 0.0681818181818 0.235 221.6M
4CE FORCE COMMODITIE 0.0952380952381 -0.115384615385 -0.622950819672 -0.557692307692 0.023 10.2M
AVZ AVZ MINERALS 0.0789473684211 -0.108695652174 -0.517647058824 -0.672 0.082 153.0M
LPI LITHIUM POWER IN 0.0740740740741 -0.121212121212 -0.107692307692 -0.553846153846 0.29 77.4M
ENT ENTERPRISE METAL 0.0714285714286 0 -0.4 -0.4 0.015 5.8M
BMT BERKUT MINERALS 0.0666666666667 0.111111111111 -0.407407407407 -0.771428571429 0.08 4.3M
MCT METALICITY 0.0588235294118 0 -0.28 -0.55 0.018 12.0M
LPD LEPIDICO 0.0588235294118 0 -0.571428571429 -0.694915254237 0.018 57.1M
ARE ARGONAUT RESOURC 0.0555555555556 -0.0952380952381 -0.0952380952381 -0.269230769231 0.019 29.5M
BSM BASS METALS 0.0526315789474 -0.0909090909091 -0.333333333333 0 0.02 47.8M
KSN KINGSTON RESOURC 0.05 -0.0454545454545 -0.0454545454545 0.05 0.021 26.9M
CFE CAPE LAMBERT RES 0.05 0.235294117647 -0.432432432432 -0.0454545454545 0.021 22.3M
VMS VENTURE MINERALS 0.0454545454545 0 -0.30303030303 -0.640625 0.023 12.5M
EUR EUROPEAN LITHIUM 0.0454545454545 -0.0416666666667 -0.410256410256 0.949152542373 0.115 63.0M
HWK HAWKSTONE MINING 0.0434782608696 -0.142857142857 -0.2 -0.0769230769231 0.024 13.7M
GXY GALAXY RESOURCES 0.031007751938 0.136752136752 -0.179012345679 -0.286863270777 2.66 1.1B
AJM ALTURA MINING 0.025 -0.0681818181818 -0.438356164384 -0.467532467532 0.205 391.4M
BAU BAUXITE RESOURCE 0.0178571428571 0.0178571428571 -0.161764705882 -0.313253012048 0.057 12.2M
RIO RIO TINTO 0.0170983794819 0.029180116204 -0.0710872858641 0.124418112569 79.71 120.7B
ZNC ZENITH MINERALS 0.0119047619048 0.0119047619048 -0.514285714286 -0.346153846154 0.085 18.1M
MQR MARQUEE RESOURCE 0.0111111111111 -0.412903225806 -0.760526315789 -0.636 0.091 3.9M
ZEU ZEUS RESOURCES L 0 0.0833333333333 -0.133333333333 -0.277777777778 0.013 2.3M
SYA SAYONA MINING 0 -0.0689655172414 -0.425531914894 -0.325 0.027 44.6M
SUH SOUTHERN HEMISPH 0 -0.145161290323 0.0392156862745 -0.688235294118 0.053 4.6M
SI6 SIX SIGMA METALS 0 0 -0.615384615385 -0.722222222222 0.005 2.3M
RLC REEDY LAGOON 0 -0.222222222222 -0.3 -0.857142857143 0.007 2.8M
PLL PIEDMONT LITHIUM 0 -0.0714285714286 -0.277777777778 -0.315789473684 0.13 69.9M
N27 NORTHERN COBALT 0 -0.142857142857 -0.666666666667 -0.797752808989 0.09 4.6M
MZN MARINDI METALS L 0 -0.166666666667 -0.583333333333 -0.736842105263 0.005 9.9M
MOX MONAX MINING 0 0 -0.5 -0.777777777778 0.002 1.8M
MLS METALS AUSTRALIA 0 -0.25 -0.571428571429 -0.4 0.003 7.0M
LRS LATIN RESOURCES 0 0 -0.5 -0.555555555556 0.004 12.8M
LI3 LITHIUM CONSOLID 0 0.0843373493976 0.153846153846 -0.526315789474 0.09 8.1M
IEC INTRA ENERGY COR 0 -0.0769230769231 0.2 1 0.012 4.7M
GPP GREENPOWER ENERG 0 0 -0.5 -0.818181818182 0.004 6.3M
ESR ESTRELLA RESOURC 0 0.105263157895 -0.0869565217391 -0.34375 0.021 10.3M
DTM DART MINING NL 0 0.142857142857 -0.2 -0.111111111111 0.008 6.9M
CMC CHINA MAGNESIUM 0 0.111111111111 0.666666666667 0.304347826087 0.03 8.8M
CGM COUGAR METALS NL 0 -0.25 -0.571428571429 -0.769230769231 0.003 2.9M
CAD CAENEUS MINERALS 0 0 0 -0.666666666667 0.001 14.1M
BGS BIRIMIAN 0 -0.130434782609 -0.59595959596 -0.569892473118 0.2 46.7M
AMD ARROW MINERALS L 0 -0.117647058824 -0.4 -0.758064516129 0.015 4.6M
AGO ATLAS IRON 0 0 0.40625 1.5 0.045 432.9M
ADV ARDIDEN 0 -0.125 -0.588235294118 -0.631578947368 0.007 11.7M
PLS PILBARA MINERALS -0.0116279069767 0.0828025477707 -0.0909090909091 -0.0810810810811 0.85 1.5B
TAW TAWANA RESOURCES -0.0188679245283 0.0612244897959 -0.393939393939 -0.341772151899 0.26 153.2M
KDR KIDMAN RESOURCES -0.0225563909774 0.413043478261 -0.434782608696 0.003861003861 1.3 497.5M
EMH EUROPEAN METALS -0.0238095238095 0.0789473684211 0.188405797101 -0.414285714286 0.41 58.0M
LIT LITHIUM AUSTRALI -0.0309278350515 -0.06 -0.276923076923 -0.572727272727 0.094 44.1M
KOR KORAB RESOURCES -0.0357142857143 -0.0689655172414 -0.357142857143 -0.15625 0.027 8.3M
WKT WALKABOUT RESOUR -0.04 -0.127272727273 -0.232 -0.0103092783505 0.096 29.5M
POS POSEIDON NICKEL -0.0408163265306 -0.0408163265306 0 0.0217391304348 0.047 121.6M
ARM AURORA MINERALS -0.0454545454545 -0.0454545454545 -0.25 -0.461538461538 0.021 2.3M
PIO PIONEER RESOURCE -0.0555555555556 -0.105263157895 -0.190476190476 -0.484848484848 0.017 25.6M
DGR DGR GLOBAL -0.0666666666667 -0.125 0.573033707865 0.4 0.14 85.8M
SEI SPECIALITY METAL -0.0714285714286 -0.0714285714286 -0.409090909091 0 0.013 7.8M
KTA KRAKATOA RESOURC -0.0740740740741 -0.21875 -0.285714285714 -0.5 0.025 2.9M
DEG DE GREY MINING -0.0740740740741 -0.137931034483 -0.21875 -0.537037037037 0.125 45.0M
KAI KAIROS MINERALS -0.0769230769231 -0.272727272727 -0.368421052632 -0.730337078652 0.024 20.5M
TRT TODD RIVER RESOU -0.0777777777778 -0.0674157303371 0.106666666667 -0.565445026178 0.083 7.8M
SRK STRIKE RESOURCES -0.0833333333333 0 0.0377358490566 -0.112903225806 0.055 8.0M
WML WOOMERA MINING L -0.0927835051546 -0.2 -0.266666666667 0 0.088 10.6M
TAR TARUGA MINERALS -0.0983606557377 -0.202898550725 -0.738095238095 -0.395604395604 0.055 7.8M
PSC PROSPECT RESOURC -0.107142857143 -0.0740740740741 -0.342105263158 -0.45652173913 0.025 51.6M
OAR OAKDALERESOURCES -0.111111111111 -0.111111111111 -0.466666666667 -0.627906976744 0.016 1.0M
LCD LATITUDE CONSOLI -0.111111111111 -0.157894736842 -0.567567567568 -0.384615384615 0.016 4.4M
AOU AUROCH MINERALS -0.125 -0.263157894737 -0.285714285714 -0.72 0.07 6.9M
TKL TRAKA RESOURCES -0.125 -0.2 -0.363636363636 -0.555555555556 0.028 9.3M
ADN ANDROMEDA METALS -0.125 0.166666666667 -0.125 -0.222222222222 0.007 8.6M
MIN MINERAL RESOURCE -0.128802588997 -0.108018555335 -0.311508951407 -0.230857142857 13.46 2.5B
MZZ MATADOR MINING -0.133333333333 -0.133333333333 -0.037037037037 -0.0714285714286 0.26 14.3M
NMT NEOMETALS -0.134615384615 -0.0425531914894 -0.307692307692 -0.505494505495 0.225 122.4M
THR THOR MINING-CDI -0.137931034483 -0.193548387097 -0.342105263158 -0.193548387097 0.025 16.9M
VMC VENUS METALS COR -0.142857142857 -0.210526315789 0.2 -0.0625 0.15 14.8M
MTH MITHRIL RESOURCE -0.142857142857 -0.333333333333 -0.571428571429 -0.85 0.006 1.4M
ORN ORION MINERALS L -0.148148148148 -0.258064516129 -0.510638297872 -0.28125 0.023 43.1M
SCI SILVER CITY MINE -0.166666666667 -0.25 -0.625 -0.558823529412 0.015 3.7M
PNN PEPINNINI LITHIU -0.166666666667 -0.285714285714 -0.8 -0.871794871795 0.005 3.4M
CHK COHIBA MINERALS -0.166666666667 -0.166666666667 -0.444444444444 -0.444444444444 0.005 2.8M
AVL AUSTRALIAN VANAD -0.170731707317 -0.15 -0.15 0.7 0.034 60.5M
VXR VENTUREX RESOURC -0.173913043478 -0.116279069767 -0.025641025641 -0.396825396825 0.19 45.6M
KLH KALIA -0.2 -0.2 -0.6 -0.733333333333 0.004 10.1M
CAZ CAZALY RESOURCES -0.233333333333 -0.148148148148 -0.59649122807 -0.439024390244 0.023 5.3M
MTC METALSTECH -0.266666666667 -0.241379310345 -0.696551724138 -0.853333333333 0.044 5.1M
GWR GWR GROUP -0.290322580645 0.1 -0.435897435897 0 0.11 27.8M